[Senate Hearing 109-324]
[From the U.S. Government Publishing Office]
S. Hrg. 109-324
TREATIES
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 29, 2005
__________
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COMMITTEE ON FOREIGN RELATIONS
RICHARD G. LUGAR, Indiana, Chairman
CHUCK HAGEL, Nebraska JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia CHRISTOPHER J. DODD, Connecticut
NORM COLEMAN, Minnesota JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio RUSSELL D. FEINGOLD, Wisconsin
LAMAR ALEXANDER, Tennessee BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire BILL NELSON, Florida
LISA MURKOWSKI, Alaska BARACK OBAMA, Illinois
MEL MARTINEZ, Florida
Kenneth A. Myers, Jr., Staff Director
Antony J. Blinken, Democratic Staff Director
(ii)
?
C O N T E N T S
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Page
Balton, Hon. David A., Deputy Assistant Secretary for Oceans and
International Environmental and Scientific Affairs, Department
of State....................................................... 3
Prepared statement........................................... 5
Lugar, Hon. Richard G., U.S. Senator from Indiana................ 1
McRae, James Bennett, Assistant General Counsel, Civilian Nuclear
Programs, Department of Energy................................. 20
Prepared statement........................................... 21
Stern, Warren M., Senior Coordinator for Nuclear Safety,
Department of State............................................ 17
Prepared statement........................................... 18
Appendix
Responses to Additional Questions Submitted for the Record by
Members of the Committee
Responses to Additional Questions Relating to the Convention
on the Conservation and Management of the Highly Migratory
Fish Stocks in the Western and Central Pacific Ocean
(Treaty Doc. 109-1)........................................ 33
Responses to Additional Questions Relating to the Convention
for the Strengthening on the Inter-American Tropical Tuna
Commission (Treaty Doc. 109-2)............................. 35
Responses to Additional Questions Relating to MARPOL Annex VI
(Treaty Doc. 108-7)........................................ 36
Responses to Additional Questions Relating to the Convention
on Supplementary Compensation for Nuclear Damage (Treaty
Doc. 107-21)............................................... 42
(iii)
TREATIES
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Thursday, September 29, 2005
U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 9:33 a.m. in Room
SD-419, Dirksen Senate Office Building, Hon. Richard G. Lugar
[chairman] presiding.
Present: Senators Lugar [presiding].
OPENING STATEMENT OF HON. RICHARD G. LUGAR,
U.S. SENATOR FROM INDIANA
The Chairman. This meeting of the Senate Foreign Relations
Committee is called to order. The committee meets today to hear
testimony on five treaties. Within the Congress, the Senate
Foreign Relations Committee is charged with the unique
responsibility of reviewing treaties negotiated by the
administration. Our colleagues in the Senate depend on us to
make timely and judicious recommendations on treaties.
We are pleased that the Bush administration has negotiated
these agreements. We look forward to hearing from these
officials about why they believe the Senate should approve
them.
In advance of this hearing, committee staff members have
reviewed these treaties carefully. We have held two formal
committee briefings covering treaties, with administration
representatives available to answer questions. I appreciate the
support and cooperation of the distinguished ranking member,
Senator Biden, throughout that process.
On our first panel, we welcome Mr. David Balton, Deputy
Assistant Secretary of State for Oceans and International
Environmental and Scientific Affairs. He will testify on four
treaties related to international fisheries and the ocean
environment.
The first of these treaties relates to marine pollution.
The 1973 International Convention for the Prevention of
Pollution from Ships, as modified by the Protocol of 1978,
commonly referred to as ``MARPOL,'' is the global framework
agreement to control discharges of pollution from ships. Today
we will be considering the 1997 protocol amending MARPOL and
adding Annex VI, which contains regulations for preventing air
pollution.
Among other measures, MARPOL Annex VI limits the discharge
of nitrogen oxides from larger marine diesel engines, governs
the sulphur content of marine diesel fuel, prohibits the
emission of ozone-depleting substances, and set standards for
shipboard incinerators and fuel oil quality, and establishes
requirements for platforms and drilling rigs at sea.
Mr. Balton will also address three treaties related to fish
stocks in the Pacific Ocean. The United States-Canada Agreement
on Pacific Hake-Whiting creates a formal process through which
scientists and fishery managers from both nations will
recommend annual total catches of Pacific whiting, also known
as Pacific hake. This agreement would establish for the first
time percentage shares of the trans-boundary stock of Pacific
whiting for each nation. The treaty is designed to alleviate
overfishing and to provide long-term stability for harvesters
and processors.
The third treaty, the Convention on Conservation and
Management of Highly Migratory Fish Stocks in the Western and
Central Pacific Ocean, provides for the long-term conservation
and sustainable use of fish stocks, such as tuna, swordfish,
and marlin. These important fish migrate across the high seas
of the western and central Pacific Ocean, as well as through
waters under fishery jurisdiction of several nations, including
the United States. The Convention creates a new regional
fishery management organization for this area.
Similarly, the convention for the strengthening of the
Inter-American Tropical Tuna Commission, known as the Antigua
Convention, provides for the long-term conservation and
sustainable use of highly migratory fish stocks, such as tuna
and swordfish, which range across the eastern Pacific. The
Antigua Convention would update a 1949 convention to reflect
improved methods in managing international marine reserves.
On our second panel, the committee will hear testimony from
Warren Stern, Senior Coordinator for Nuclear Safety at the
Department of State, and Mr. James Bennett McRae, Assistant
General Counsel for Civilian Nuclear Programs at the Department
of Energy. This will discuss the Convention on Supplementary
Compensation for Nuclear Damage, known as the CSC. Adopted at a
conference convened by the International Atomic Energy
Commission, the CSC is an effort to create a global nuclear
civil liability regime compatible with the existing U.S.
nuclear civil liability law under the Price-Anderson Act.
The Price-Anderson Act, which was recently reauthorized by
Congress in the comprehensive energy bill, has set the standard
for nuclear liability in the United States for many years. The
CSC is designed to limit the liability now facing United States
suppliers of nuclear technology with respect to their
activities in foreign markets. This treaty would help U.S.
companies export nuclear safety technology to foreign nations.
At the same time, the CSC's creation of a supplementary
international fund is expected to help ensure that potential
victims of a civil nuclear incident overseas will be adequately
compensated.
The United States' ratification of the CSC could be a step
toward establishing a common international nuclear liability
standard. It would also encourage improvements in civilian
nuclear plant safety overseas and provide liability standards
that would level the playing field for American suppliers and
bring more predictability to the market.
I commend the American negotiators who have worked on these
five agreements, some of which are the product of years of
patient diplomacy. We look forward to the contributions of our
witnesses to our understanding.
I would like now to call upon the first panel. This is in
fact the Honorable David Balton, Deputy Assistant Secretary of
State. Secretary Balton, would you please proceed. I understand
you will discuss the first four treaties that we are to hear
this morning, and then we will have discussion of the fifth
treaty with your colleagues at the table at that time.
Please proceed.
STATEMENT OF HON. DAVID A. BALTON, DEPUTY ASSISTANT SECRETARY
FOR OCEANS AND INTERNATIONAL ENVIRONMENTAL AND SCIENTIFIC
AFFAIRS, DEPARTMENT OF STATE
Mr. Balton. Thank you very much, Mr. Chairman. I have a
written statement and ask that it be included in full in the
record, and that will be true of the statements of each of the
witnesses today.
Thank you. I appreciate the opportunity to testify on four
treaties relating to the oceans, the ones you outlined: the
U.S.-Canada Agreement on Pacific Hake-Whiting; the Convention
for the Strengthening of the Inter-American Tropical Tuna
Commission, also known as the Antigua Convention; the Western
and Central Pacific Fisheries Convention, and Annex VI to the
MARPOL Convention.
Mr. Chairman, today's hearing takes place at a time of
increased attention and concern about the oceans and their
resources. The U.S. Commission on Ocean Policy presented its
comprehensive report, ``An Ocean Blueprint for the 21st
Century,'' one year ago, detailing the many challenges we face
in this regard. The administration has issued and has begun to
implement the U.S. Ocean Action Plan, building on the Ocean
Commission report and other initiatives. Congress is also
considering several pieces of legislation to strengthen our
stewardship of the oceans.
As these efforts move forward, we must recognize that no
nation acting alone can address issues relating to the oceans
fully or effectively. For fisheries and other resources that
cross jurisdictional lines in the seas, we must secure the
cooperation of other nations to conserve and manage those
resources sustainably. Similarly, the control and reduction of
pollution affecting the oceans, including air pollution from
ships, require concerted international action.
All four of the oceans treaties before you today represent
successful efforts to secure such cooperation. In each case,
U.S. negotiating teams representing the full range of U.S.
interests on these matters labored hard to reach the
agreements. Due in large part to this inclusive approach, I am
pleased to report that affected stakeholders in the United
States support ratification of all four of these treaties.
Indeed, I am aware of no opposition to any of them.
Of course, each treaty has its own unique purpose and
particular features. Please allow me to summarize each in turn.
I will begin with the U.S.-Canada agreement on Pacific whiting.
This provides for the first time a stable and equitable basis
on which our two nations can share a valuable stock of fish,
known generally in the United States as Pacific whiting and in
Canada as Pacific hake. This fish stock occurs off the West
Coast of North America from California to British Columbia. The
fishery in the United States alone has a value of more than $20
million annually.
U.S. and Canadian scientists fishery managers have
cooperated informally for many years to develop an annual
overall total allowable catch, or TAC, for the stock. But our
two countries have not been able to agree until now on how to
divide the TAC between U.S. and Canadian fisheries. The United
States has generally claimed and taken roughly 80 percent of
the allowable catch, while Canada has claimed and taken roughly
30 percent. This situation, coupled with other factors, led to
a decline in the stock. In 2002 the Department of Commerce
declared the stock to be overfished.
The Pacific whiting agreement reflects a commitment by both
nations and their respective industries to resolve this issue
for the sake of the stock and for the sake of the fishery. The
agreement assigns almost 74 percent of the TAC to the United
States and slightly more than 26 percent to Canada. The
agreement also formalizes the means by which U.S. and Canadian
scientists and fisheries managers will determine the total
catch each year. Stakeholders from both countries will have
significant input into this process.
I will now turn to the Convention for Strengthening the
Inter-American Tropical Tuna Commission. In 1949, as you said,
Mr. Chairman, the United States and Costa Rica developed an
initial treaty to create the Inter-American Tropical Tuna
Commission, or the IATTC, as an international fisheries
organization to conserve and manage the fisheries for tuna and
related species in the eastern Pacific Ocean. The IATTC now has
14 members as well as five other states and entities that
participate in its work.
The years since the inception of the IATTC have witnessed
dramatic changes in international law and norms relating to
ocean fisheries. In light of these changes, the states and
entities participating in the IATTC agreed to renegotiate the
original treaty, primarily to incorporate modern principles of
fisheries management. Negotiations resulted in the Convention
before you today, which the United States signed on November
14, 2003.
The Antigua Convention, named for the city in Guatemala
where it was adopted, will significantly strengthen the legal
and policy framework on which the valuable work of the IATTC
rests. Early U.S. ratification would provide valuable momentum
to bring the Convention into force and would demonstrate our
continued commitment on and leadership in international
fisheries issues.
The Western and Central Pacific Fisheries Convention
establishes a brand new international fisheries organization to
conserve and manage tunas and related species in that portion
of the Pacific Ocean not covered by the IATTC. These two
organizations, the IATTC and the Western and Central Pacific
Fisheries Commission, will together provide for sustainable
management of fisheries throughout the Pacific Ocean.
The tuna fisheries of the western and central Pacific are
the largest and most valuable in the world. Implementation of
this convention offers the opportunity to conserve and
responsibly manage these resources while the threat of
overfishing and overcapacity are still at a manageable stage.
This Convention entered into force more than 1 year ago.
Given the central role that the United States played in its
negotiation and the significance of these fisheries to U.S.
commercial and environmental interests, the administration
believes that it is high time for the United States to take its
seat at the table as a party to this treaty.
Finally, the International Convention for the Prevention of
Pollution from ships, also known as MARPOL, is the primary
treaty to control the accidental and operational discharges of
pollutants from ships. The convention, negotiated under the
auspices of the International Maritime Organization, now
consists of a framework agreement as well as six annexes, each
of which addresses a particular source of ship-based pollution.
The United States is already a party to MARPOL and four of its
annexes.
Annex VI, before you today, deals with air pollution from
ships. It does so in part by establishing design standards for
marine diesel engines installed after 1 January 2000 for the
reduction of oxides of nitrogen. The Annex also sets a global
cap of 4.5 percent on the sulphur content of marine fuels, as
well as a mechanism for reducing the sulphur content to 1.5
percent in particular areas, so-called SOX emission
control areas. The administration contemplates seeking the
establishment of such areas in waters adjacent to North America
where ship emissions contribute to air quality problems in the
United States, Canada, and Mexico.
Annex VI also prohibits the deliberate emission from ships
of ozone-depleting substances, including halons and CFCs, and
prohibits the incineration onboard ship of certain products,
such as contaminated packaging materials and PCBs. Annex VI
entered into force on May 19 of this year. There are currently
27 parties to it, representing almost two-thirds of the world's
tonnage of merchant ships.
U.S. ratification will enhance our ability to work through
the IMO to establish even more stringent global emission
reduction standards in the future.
Thank you, Mr. Chairman, for the opportunity to discuss
these issues. I would be happy to answer any questions you may
have. I also have with me Mr. Brian Wood-Thomas of the
Environmental Protection Agency to help me in responding to any
technical questions relating to MARPOL Annex VI. Thank you.
[Secretary Balton's prepared statement follows:]
Prepared Statement of Hon. David A. Balton
Mr. Chairman and members of the committee: I appreciate the
opportunity to testify today on four treaties relating to the oceans:
the Agreement between the Government of the United States of
America and the Government of Canada on Pacific Hake/Whiting
(Whiting Agreement);
the Convention for the Strengthening of the Inter-American
Tropical Tuna Commission (Antigua Convention);
the Convention on the Conservation and Management of the
Highly Migratory Fish Stocks in the Western and Central Pacific
Ocean, with Annexes (WCPF Convention); and
the Protocol of 1997 to Amend the International Convention
for the Prevention of Pollution from Ships, 1973, as Modified
by the Protocol of 1978 thereto (MARPOL Annex VI)
The first three of these treaties concern the conservation and
management of vital fisheries resources shared between the United
States and other nations. The fourth treaty regulates air pollution
from ocean-going vessels. The administration urges the Senate to review
all four of these agreements favorably, with a view to providing advice
and consent to their ratification as soon as possible.
Mr. Chairman, today's hearing takes place at a time of increased
attention and concern about the oceans and their resources. The U.S.
Commission on Ocean Policy presented its comprehensive report, ``An
Ocean Blueprint for the 21st Century,'' one year ago, detailing the
many challenges we face in this. regard. The administration has issued
and has begun to implement the U.S. Ocean Action Plan, building on the
Ocean Commission report and other initiatives. Congress is also
considering a number of pieces of legislation to strengthen the ability
of this Nation to act as a proper steward of the oceans.
As these efforts move forward, we must recognize that no nation
acting alone can address issues relating to the oceans fully or
effectively. For fisheries and other resources that cross
jurisdictional lines in the seas we must secure the cooperation of
other nations to conserve and manage those resources sustainably.
Similarly, the control and reduction of pollution affecting the
oceans--including air pollution from ships--requires concerted
international action.
All four treaties before you today represent successful efforts to
secure such international cooperation. In each case, U.S. negotiating
teams, representing the full range of U.S. interests on these matters,
labored hard to reach the agreements. Due in large part to this
inclusive approach, I am pleased to report that affected stakeholders
in the United States support ratification of all these treaties.
Indeed, I am aware of no opposition to them.
Of course, each treaty has its own unique purpose and particular
features, as outlined below. Ratification of each treaty would also
require the enactment of legislation to implement U.S. obligations.
Mr. Chairman, I will now present a brief summary of each treaty.
AGREEMENT WITH CANADA ON PACIFIC HAKE/WHITING
This Agreement with Canada provides, for the first time, a stable
and equitable basis on which our two nations can share a valuable stock
of fish whose range includes Pacific waters off of our respective West
Coasts. This fish, known generally in the United States as Pacific
whiting and in Canada as Pacific hake, is used principally in the
manufacture of surimi, which is the basis for such products as
imitation crab legs and shrimp. The fishery, which takes place in
waters off Northern California, Oregon, Washington, and British
Columbia, was worth approximately $21.9 million to U.S. fishermen in
2004. The fish is processed both at sea and by land-based firms. The
fishery also has a substantial economic impact on several fishing
ports, such as Crescent City and Eureka in California and Astoria and
Newport in Oregon.
Beginning in the 1970s, scientists and fisheries managers from the
United States and Canada reached informal agreement on an annual
overall total allowable catch (TAC) for the stock. The two countries
conducted periodic joint stock assessments and agreed informally on
certain management measures, but not the most important one--how to
divide the TAC between U.S. and Canadian fisheries. The United States
generally claimed 80% of the allowable catch, while Canada took 30%.
This situation, coupled with other factors, led to a decline in the
stock. In 2002, for the first time, the Department of Commerce declared
the stock to be ``overfished.''
Following resumed talks in 2002, both sides agreed in principle in
April 2003 to the text of a new long-term management and sharing
arrangement. The Agreement, signed at Seattle on November 21, 2003,
establishes a default harvest policy and assigns 73.88% of the TAC to
the United States and 26.12% to Canada for an initial period of nine
years, and thereafter unless the Parties agree to change it. It also
creates a formal process through which U.S. and Canadian scientists and
fisheries managers will determine the total catch of hake each year, to
be divided by the percentage formula. Stakeholders from both countries
will have significant input into this process.
The U.S. fishing industry strongly supports the Agreement. It not
only allows the Parties to redress the overfishing that had led to the
recent decline in stock levels, but also provides for long-term
stability to U.S. fishers and processors and a structure for future
scientific collaboration.
Legislation will be necessary to implement this agreement. The
administration anticipates that such legislation will be relatively
short and straightforward. We have already been in contact with
relevant committees in Congress to suggest possible wording for such
legislation.
CONVENTION STRENGTHENING THE INTER-AMERICAN TUNA COMMISSION
The Inter-American Tropical Tuna Commission (IATTC) is an
international fisheries organization with a mission to conserve and
manage the fisheries for tuna and related species in the Eastern
Pacific Ocean. The treaty establishing the IATTC was initially
concluded in 1949 as a bilateral agreement between the United States
and Costa Rica. Since then, the organization has grown to include 14
members, as well as five other States and entities that enjoy the
status of ``cooperating non-parties.''
Several years ago, the States and entities participating in the
IATTC agreed to re-negotiate the original treaty, primarily to
incorporate modern principles of fisheries management. Negotiations
toward this end resulted in the Convention for the Strengthening of the
Inter-American Tropical Tuna Commission (IATTC), also known as the
Antigua Convention, adopted on June 27, 2003, in Antigua, Guatemala.
The United States signed the Convention on November 14, 2003.
The United States Government, represented by the Departments of
State and Commerce, as well as stakeholders from the U.S. fishing
industry and conservation community, played a central role in the
negotiation of the Antigua Convention. The administration, supported by
these stakeholders, believes that this treaty will serve as a strong
and comprehensive basis for the future work of the IATTC. The Antigua
Convention faithfully incorporates valuable provisions of other recent
fisheries treaties, particularly the 1995 United Nations Fish Stocks
Agreement, to which the United States is already a party. The Antigua
Convention will also provide a sound legal framework for protecting
U.S. interests in this fishery, including by creating a mechanism in
which both the European Union and Taiwan can participate fully in the
work of the IATTC and be bound by the regulatory measures adopted by
that organization.
The Antigua Convention will enter into force fifteen months after
the deposit of the seventh instrument of ratification, acceptance,
approval, or accession by States that were Parties to the 1949
Convention on November 14, 2003. To date, 12 States and the European
Commission have signed the Convention. Two countries, Mexico and El
Salvador, have so far deposited instruments of ratification. In
addition, Taiwan has signed an instrument declaring its firm commitment
to abide by the terms of the Antigua Convention, subject to
confirmation.
Early U.S. ratification would provide valuable momentum to bring
the Antigua Convention into force and would demonstrate our continued
commitment to and leadership on international fisheries issues.
Although the United States could implement much of the Antigua
Convention under existing statutory authority, the administration will
propose legislation to effect certain changes in U.S. law, principally
the Tuna Conventions Act of 1950, as amended, to provide the strongest
basis for implementing the Antigua Convention.
convention on the conservation and management of highly migratory fish
STOCKS IN THE CENTRAL AND WESTERN PACIFIC OCEAN
Unlike the Antigua Convention, which is designed to strengthen the
underlying treaty of an international fisheries organization that has
existed for more than half a century, the Convention on the
Conservation and Management of the Highly Migratory Fish Stocks of the
Western and Central Pacific Ocean, with Annexes, (``the WCPF
Convention''), establishes a brand new international fisheries
organization to conserve and manage tunas and related species in that
portion of the Pacific Ocean not covered by the IATTC. The two
organizations will have complementary mandates intended to provide for
effective and sustainable management of these fisheries throughout the
entire Pacific Ocean.
The WCPF Convention was adopted on September 5, 2000, in Honolulu.
The United States signed the Convention on that date. The Convention
entered into force on June 19, 2004, and now boasts 20 parties. In
addition, Taiwan has signed an instrument declaring its firm commitment
to abide by the terms of the WCPF Convention, subject to confirmation.
The United States is one of the few original signatories yet to ratify
or accede.
The United States played a lead role during the negotiations on a
wide range of issues. One such issue was the effort to afford
membership in the Commission to Taiwan under the terms of the separate
instrument noted above. As a result, for the first time in any regional
fisheries organization, vessels from Taiwan will be bound by the terms
of the Convention, including the conservation and management measures
adopted pursuant thereto. Similar arrangements were subsequently
included in the Antigua Convention, discussed above, which was adopted
after the adoption of the WCPF Convention.
The highly migratory fish stocks of the Western and Central Pacific
are of great significance to the United States and the other nations
involved in those fisheries. Indeed, the tuna fisheries in that region
are the largest and most valuable in the world. Implementation of the
WCPF Convention offers the opportunity to conserve and responsibly
manage these resources while the threat of overfishing and over-
capacity are still at a manageable stage, before conditions deteriorate
as we have seen too often elsewhere in the world's oceans.
The WCPF Convention builds upon the 1982 United Nations Convention
on the Law of the Sea (the LOS Convention) and the 1995 United Nations
Agreement on the Conservation and Management of Straddling Fish Stocks
and Highly Migratory Fish Stocks (the Fish Stocks Agreement). The WCPF
Convention gives effect to the provisions of the LOS Convention and
Fish Stocks Agreement that recognize as essential, and require,
cooperation to conserve highly migratory fish stocks through regional
fishery management organizations, by those with direct interests in
them--coastal States with authority to manage fishing in waters under
their jurisdiction and those nations whose vessels fish for these
stocks.
The United States has direct and important interests in the
effective implementation of the WCPF Convention. The United States is a
major distant water fishing nation, with the fourth largest catch in
the region. At the same time, the United States is the coastal State
with the largest EEZ in the Convention Area (including the waters
around Hawaii, American Samoa, Guam, the Northern Mariana Islands and
other unincorporated islands under U.S. jurisdiction). Accordingly,
U.S. fishing concerns, including the U.S. tuna industry, U.S.
conservation organizations and U.S. consumers, as well as the residents
of Hawaii and the U.S. Flag Pacific island areas of Guam, American
Samoa and the Northern Mariana Islands, all have a crucial stake in the
health of the oceans and their resources as promoted by the WCPF
Convention.
PROTOCOL OF 1997 TO AMEND THE INTERNATIONAL CONVENTION FOR THE
PREVENTION OF POLLUTION FROM SHIPS, 1973, AS MODIFIED BY THE PROTOCOL
OF 1978 THERETO (MARPOL ANNEX VI)
Negotiated under the auspices of the International Maritime
Organization (IMO), the International Convention for the Prevention of
Pollution from Ships (MARPOL Convention) is the primary international
agreement to control the accidental and operational discharges of
pollutants from ships. The Convention currently includes a framework
agreement and six annexes that address particular sources of marine
pollution from ships. The United States is already a party to MARPOL
and four of its annexes.
Annex VI establishes an international framework addressing air
pollution from ships and will make an important contribution to the
protection of the environment by addressing harmful air pollutants from
ships. In short, the Annex establishes design standards for marine
diesel engines installed after 1 January 2000 for the reduction of
oxides of nitrogen (NOX) and establishes a global cap of 4.5
percent on the sulfur content of marine fuels, as well as a mechanism
for reducing the sulfur content to 1.5 percent in particular areas
(called SOX Emission Control Areas) where SOX
reduction is considered necessary. The administration contemplates
seeking the establishment of such areas in waters adjacent to North
America where ship emissions contribute to air quality problems in the
United States, Canada and Mexico. Annex VI also prohibits the
deliberate emission of ozone-depleting substances, including halons and
chlorofluocarbons, from ships and prohibits the incineration onboard
ship of certain products, such as contaminated packaging materials and
polychlorinated biphenyls (PCBs).
Annex VI entered into force on May 19, 2005. There are currently 27
parties to it, representing almost two thirds of the world's tonnage of
merchant ships. U.S. ratification will enhance our ability to work
through the IMO to establish more stringent global emission reduction
standards in the future. To this end, the President has proposed a
declaration expressing support for an Annex VI amendment to establish
Tier II emission standards that will further reduce the agreed
NOX emission control limits. The President has proposed one
other declaration regarding the application of Regulation 15 concerning
volatile organic compound emissions (VOCs). Most importantly, the
President has also proposed a formal understanding highlighting the
point that Parties are permitted to impose more stringent
NOX limits as a condition of entry into their ports. The
United States is presently engaged in discussions at the IMO to explore
more stringent standards for NOX and sulfur content of
marine fuels. The discussions currently underway at IMO will also
consider standards for particulate matter (PM), volatile organic
compounds (VOCs), and expansion of the Annex to include non-diesel
engines.
Before closing, Mr. Chairman, I note that the administration
continues to press forward on other international agreements pertaining
to the oceans and looks forward to working with the committee once
again.
Thank you, Mr. Chairman, for the opportunity to discuss these
issues. I would be happy to answer any questions from the members of
the committee.
The Chairman. Thank you very much, Secretary Balton, for
your comprehensive opening statement that was made a part of
the record and likewise your testimony this morning.
I am going to raise questions initially about the first
four treaties because they are different in character than the
final treaty and we will take it up separately, after you have
responded to these questions. The answers to some of these
questions you have either testified upon or more
comprehensively addressed in your lengthier statement. But for
the sake of the record, so that it is clear to all Senators who
are watching at least the work of the committee and considering
their support of ratification, please respond if you can
briefly to each of these questions.
How would implementation of the Pacific hake-whiting
agreement affect the Pacific whiting industry in the United
States? Specifically, do you expect it to have an economic
impact on United States ports and facilities used by this
fishery and what effects do you foresee for the fish stock?
Mr. Balton. Thank you, Mr. Chairman. The whiting agreement
has a very limited purpose, which is to set a total allowable
catch of this stock annually and divide it between U.S. and
Canadian fisheries. All other aspects of managing the fishery
for this stock in the United States will remain unaffected by
the agreement.
But, that said, I do anticipate that the agreement will
have a very positive effect on both the stock and on the
industry in the United States that relies on it. The collective
overfishing that the U.S. and Canada have engaged in in the
absence of this agreement contributed to the decline of the
stock. Now, with this agreement we have the ability to prevent
such overfishing, which should increase the possibility for
long-term sustainable harvests.
The Chairman. How does the agreement relate to the work of
the Pacific Fishery Management Council and the Department of
Commerce, which are currently responsible for setting the total
allowable catch and for any sub-allocation of the fish stock
within the United States, and would the agreement impact
existing United States procedures for sub-allocation of the
U.S. catch for Pacific whiting?
Mr. Balton. Thank you, Mr. Chairman. Under the agreement,
each year Canada and the United States will work together to
produce a total allowable catch, which will then be divided
under the percentage formula agreement between the U.S. fishery
and the Canadian fishery.
The responsibility of the Pacific Fishery Management
Council of the United States for managing all aspects of the
U.S. share will not change. Similarly, the responsibility of
the Department of Commerce for overseeing the work of the
council in this respect will not change.
The Chairman. Thirdly, I understand that United States
stakeholders, both industry and environmental groups, are
supportive of the agreement, as you have testified. Please
mention how and if they were consulted during negotiation of
the agreement and, looking forward, will United States
stakeholders have any input into the process envisioned by the
agreement for setting the total allowable catch each year? In
other words, does the administration foresee a formal role for
them in any of the bodies to be set up under the agreement and,
if so, how would the United States choose the individuals who
would serve on these boards?
Mr. Balton. Mr. Chairman, U.S. stakeholders participated
very actively in the negotiations that produced the whiting
agreement. Among those who took direct part in the negotiations
as members of the U.S. delegation were: the Pacific Fisheries
Management Council itself, through its chair and executive
director; representatives of the State governments of
Washington and Oregon; representatives of four different U.S.
industry user groups, including one Indian tribe, the Maccah
Indian Tribe. Two U.S. environmental groups, also monitored the
negotiations and provided input into U.S. positions.
Indeed, I can say with certainty, Mr. Chairman, that the
agreement would not exist but for the active involvement of all
these stakeholders in creating it.
Now, looking ahead, U.S. and Canadian stakeholders will
have a very meaningful role in the implementation of this
agreement. The joint technical committee and the scientific
review group established by the agreement will each have
independent members nominated by a stakeholder advisory group.
U.S. members of the joint management committee under the treaty
will, under legislation we have suggested, include stakeholder
representatives as well.
In addition, article 2, paragraph 4 of this agreement
creates this advisory panel and gives it an ongoing right to
provide input in the development of the overall TAC each year.
The Chairman. Finally, with regard to this treaty, I
understand that implementing legislation will be required for
this agreement. What areas would be addressed in this
legislation and will the administration be seeking any new
authorities to implement the agreement?
Mr. Balton. Yes, Mr. Chairman, legislation for this
agreement is necessary in order to implement U.S. obligations
under it. We have provided informal suggestion for such
legislation to your colleagues on the Senate Commerce Committee
and the House Resources Committee as well. The legislation we
suggest would allow for the United States to appoint
individuals to the various bodies created under this agreement.
The legislation would give the Secretary of Commerce authority
to issue regulations relating to this treaty and would prohibit
acts inconsistent with the treaty. This piece of legislation
would most likely be a new free-standing law rather than an
amendment to any existing statute.
The Chairman. I thank you.
Let me ask questions with regard to the Antigua Convention.
What is the status of the highly migratory fish stocks under
the jurisdiction of the Inter-American Tropical Tuna
Commission? Are any of these considered to be overfished and
how will the Antigua Convention, how will it improve the
commission's ability to manage these stocks?
Mr. Balton. Generally speaking, Mr. Chairman, the highly
migratory stocks of the Pacific Ocean, including those in the
eastern Pacific which this treaty covers, are thought to be in
reasonably good shape relative to most stocks in the world. But
there are warning signs on the horizon. There is overcapacity,
too many vessels in this fishery, we believe, and we are
worried as well about issues of bycatch and other degradation
of the marine environment that could threaten these stocks in
the future.
The Antigua Convention would give us a much stronger basis
to deal with these problems. By incorporating the modern
principles of fishery management, we will have the ability
through this treaty to take firmer action to address potential
overfishing, overcapacity, illegal fishing, effects of fishing
on associated independent species.
The Chairman. The Antigua Convention will replace the 1949
convention that created the IATTC. Following entry into force
of the Antigua Convention, what will be the status of the
measures taken by the IATTC under the 1949 convention?
Mr. Balton. Mr. Chairman, I am confident that there will
be a seamless transition between the regime of the 1949 treaty
and the new agreement. Indeed, there are provisions in the
Antigua Convention that would provide for such a seamless
transition. There will be a period of time during which the
Antigua Convention is in force, but not all of the parties to
the original treaty have as yet ratified, but there are ways to
bridge that gap such that the measures adopted by this
organization, the IATTC, will continue to be effective, all the
assets will be preserved, and we will be moving forward
cooperatively with our colleagues in this organization.
The Chairman. The Antigua Convention requires the IATTC to
make decisions on the basis of consensus. How has this
requirement for consensus affected the IATTC's actions in the
past? Has it prevented the commission from taking measures that
the United States believed were necessary to properly manage
the fish stocks under its jurisdiction?
Mr. Balton. You are right, Mr. Chairman, that this
organization has always operated on the principle of consensus,
and at least to date I would say that that principle has served
the U.S. and the other nations in this organization well. The
organization has been marked by a strong spirit of cooperation.
There are very few times, if ever, in its history that one
nation has tried to block consensus.
There are important issues facing this regime in the
future, but we are confident that the consensus rule will not
prevent movement forward on these issues.
The Chairman. With how many parties must consensus be
gained? How many are around the table?
Mr. Balton. There are currently 14 members of the IATTC
and then there are five other states and entities that
participate in its work. Under the new agreement, which can
enter into force with seven of those original parties
ratifying, it is the parties that come together to make up
consensus. As a practical matter, Mr. Chairman, though,
everybody around the table has a voice.
The Chairman. What is the current budget for the commission
and will this change under the Antigua Convention? What is the
anticipated United States financial contribution and how are
such contributions to be determined?
Mr. Balton. There are several different aspects of that
question. The current U.S. contribution to the IATTC is roughly
$2 million a year. That is actually considerably less than it
has been at some points in the past. Our $2 million
contribution represents roughly 40 percent of the budget of
this organization. We are one of the relatively few developed
countries in this organization.
The treaty before you today does not set the contribution
rules. Those will be set on the basis of agreement within the
organization. My expectation is that U.S. contributions to this
organization will not change appreciably under the new
agreement. Indeed, the new agreement will allow the European
Union and also Taiwan to become full members of this
organization, and their contributions to the budget may help to
reduce U.S. costs in the organization.
The Chairman. You have mentioned that 14 countries were
parties to the 1949 convention that established the IATTC. Will
they in your judgment vote to ratify the new convention and are
other eligible countries expected to join the 14?
Mr. Balton. Yes to both questions, Mr. Chairman. I do
believe that all of the members of the original convention will
move to ratify the Antigua Convention. That said, I think the
U.S. ratification will be a great spur to those who have not
yet completed their processes. A lot of the countries around
the table are waiting to see what we will do. But once we move
forward I am confident they will as well, and indeed some other
countries whose vessels fish in the region may join the
organization.
The Chairman. In your testimony you have mentioned that the
administration will propose implementing legislation for this
convention. When do you expect that to happen and what types of
changes will the administration seek?
Mr. Balton. Yes, we are going to propose formally
legislation to implement this agreement. The legislation to
implement the agreement would take the form of a series of
proposed amendments to an existing statute that implements the
existing treaty, the so-called Tuna Conventions Act of 1950. It
is my anticipation that this legislation will come before
Congress in the very near future. It is in the final stages of
clearance within the administration.
The Chairman. Let me raise some questions on the third
treaty, the Western and Central Pacific Fishery Convention.
What is the status of the highly migratory fish stocks to be
governed by the WCPF convention and what impact will the
convention have on these fish stocks? How is it expected to
affect specifically the United States fishery industry?
Mr. Balton. Mr. Chairman, my answer to this question is
very similar to my answer to that question as it related to the
Antigua Convention. The status of the highly migratory fish
stocks in the western and central Pacific Ocean is generally
speaking considered to be good relative to the status of
similar stocks in other parts of the world. That said, there
are warning signs on the horizon, especially with respect to
bigeye tuna. There are problems of overfishing and overcapacity
in the region, illegal fishing, bycatch.
Once again, the entry into force of this agreement has
provided a new tool, in this case for the very first time, to
deal with these problems on a cooperative multilateral basis.
For the United States in particular, it is very important
that we be at the table as a very large segment of our tuna
industry fishes in this region of the world, the western and
central Pacific.
The Chairman. How will the commission created under the
WCPF convention coordinate with other regional fishery
management organizations, such as the IATTC that we have just
been discussing, that are managing similar species in other
areas?
Mr. Balton. As you say, Mr. Chairman, there must be
coordination between the WCPFC, the commission, and the IATTC,
that commission, because they do cover many of the same species
that range throughout the entirety of the Pacific Ocean. There
are provisions in each of these treaties that require
cooperation and compatibility of measures adopted across the
Pacific by these sister organizations.
There will be as well interaction between the Western and
Central Pacific Convention and the commission created by it and
some other regional fishery organizations, including the
Commission for the Conservation of Southern Bluefin Tuna, an
organization to which the United States is not party, that does
have overlapping jurisdiction on the other side, the area
around Australia, New Zealand, and out into the Indian Ocean.
The Chairman. Article 43 of the convention provides for
participation in the work of the commission and its subordinate
bodies short of voting rights by dependent territories located
in the convention area, including American Samoa, Guam, and the
Northern Mariana Islands, with appropriate authorization from
the parties that have responsibility for their foreign affairs.
Does the administration plan to authorize the participation of
these United States territories and did the administration work
with these territories during negotiation of the convention?
Mr. Balton. Yes and yes, Mr. Chairman. Pending the
finalization of discussions with representatives of the
territories themselves, the administration expects to authorize
the participation of American Samoa, Guam, and the Commonwealth
of the Northern Mariana Islands to participate in the work of
this agreement. These territories as a result would be allowed
to sit at the table in their own name and right and to speak on
issues in which they have a direct interest.
This is consistent with the approach taken in other
organizations in the Pacific region, such as the Secretariat of
the Pacific Community and the South Pacific Regional
Environmental Program.
The Chairman. What is the current budget of the commission
and is it expected that that budget may increase as the work of
the commission develops? Once again, what is the United States'
contribution to the commission? How will the contributions of
the parties be determined?
Mr. Balton. This commission, although it has already been
established, is still in its infancy and its initial budget is
not as robust as we expect it to become in the coming years as
it takes on some of the important management functions it is
charged with overseeing. We estimate that an initial U.S.
contribution will probably be in the order of $150,000 or so.
Because there are already 20 parties to this treaty,
including some developed countries such as Japan, we will not
have to share nearly as large a burden in the budget of this
commission as for the IATTC.
The Chairman. As you have just mentioned, the commission
has just been in force since June 2004. In fact, has the
commission met yet? What work has it undertaken and to what
extent was the United States able to participate in that work?
Mr. Balton. Yes, Mr. Chairman, the commission has already
met and will meet again in December. There are a number of
subsidiary bodies and less formal meetings that take place
under the general auspices of the convention. The United States
has been able to participate fully and effectively in these
organizations--in these bodies, I should say--despite the fact
that we have not yet ratified, because everyone expects us to
and because of the history of the United States in helping to
craft the treaty.
I do not know how long that goodwill would last if we did
not ratify some time soon, though, and that is why we are here
today to urge you to consider this favorably.
The Chairman. As one further piece of housekeeping, is
there any implementing legislation necessary for this treaty to
comply with the WCPF convention, and if so what is the status
of legislation and what might it address?
Mr. Balton. Thank you, Mr. Chairman. Yes, legislation
would be necessary to implement this agreement as well. We are
also in the final stages of clearance within the administration
and hope to have such legislation to propose to Congress
formally in the very near future. The legislation that we
propose--this will sound familiar to you--will allow for the
appointment of U.S. individuals to participate in the
scientific and management activities that take place under this
treaty. The legislation would authorize the Secretary of
Commerce to issue regulations relating to the treaty. It would
prohibit acts inconsistent with the treaty. It would authorize
the appropriation of funds related to the treaty.
This particular piece of legislation would, like the
whiting legislation, almost certainly need to be a free-
standing piece rather than a set of amendments to an existing
law.
The Chairman. I thank you.
Now let me ask questions on the fourth treaty, the MARPOL
Annex VI. First of all, fundamentally why is the treaty needed?
What is the scope of air pollution problems from ships,
particularly as it relates to the United States?
Mr. Balton. Mr. Chairman, this annex represents the first
time the international community has agreed on any standards
relating to air pollution from ships. It is very much in the
U.S. environmental and commercial interests that there be an
agreed set of standards. As shipping is inherently
international in nature, the U.S. alone cannot hope to regulate
by itself air pollution from ships that visit U.S. ports that
are flagged to foreign countries.
Through MARPOL Annex VI, we have a mechanism to create a
common set of standards that will both protect the air quality
in U.S. ports and also set a common industry standard that U.S.
vessels can adhere to as they sail around the world.
The Chairman. Annex VI to MARPOL places a number of
requirements on ships. To what extent are U.S.-flag ships
equipped to comply with these requirements? What economic
impact would compliance with these requirements have on United
States ships? Similarly, to what extent are foreign flag ships
able to meet the requirements, and what would be the impacts on
those foreign flag ships traveling to U.S. ports and waters?
Mr. Balton. Mr. Chairman, with respect to U.S. flag
vessels, I can say that most, if not all, are already in
compliance with the standards set by Annex VI, and therefore
the cost to the U.S. industry will be minimal. The current
global cap of 4.5 percent concerning sulphur content in marine
fuels will have little or no impact on the U.S. and marine fuel
markets currently since the overwhelming majority,
approximately 98 percent, of marine fuels fall under this
figure.
Now, there will be ongoing discussions within the IMO about
the possibility of making more stringent standards and the
economic impact of those standards, including on U.S. vessels,
will of course be a factor in those discussions.
The Chairman. That partially anticipates my next question,
because Annex VI establishes international standards for
controlling air pollution, but would Annex VI prohibit the
United States from implementing standards more stringent than
those in Annex VI?
Mr. Balton. No, Mr. Chairman. Indeed, the administration
is proposing a declaration to accompany a ratification of Annex
VI making clear that a port state, such as the United States,
can establish more stringent standards with respect to vessels
entering our ports.
The Chairman. My understanding is that Annex VI allows for
the establishment of sulphur oxide emission control areas,
SECAs, in which ships are required to abide by more stringent
regulations on sulphur oxide emissions. Annex VI establishes
the Black Sea as one such area and the International Maritime
Organization has approved the North Sea as a SECA.
What is the process for approval declaring an area to be an
SECA area and is the United States considering requesting the
designation of any of U.S. waters as SECAs?
Mr. Balton. I can answer the second part of that question,
Mr. Chairman. I may ask my colleague from the EPA to help
answer the first part.
With respect to the second part, yes, we are considering
the possibility of submitting to IMO a proposal to establish
one or more SECAs in the United States or waters off the United
States, on all three of our ocean coasts, Pacific Ocean,
Atlantic Ocean, and Gulf Coast.
Let me ask Mr. Wood-Thomas from the EPA to help address
your question about what the precise processes within IMO for
establishing such a SECA.
The Chairman. Mr. Thomas, would you come to the table,
please.
Mr. Wood-Thomas. Thank you, Mr. Chairman. With respect to
the establishment of a SOX emission control area,
the treaty outlines specific criteria that must be met.
Procedurally, a party or a group of parties may come forward
with a proposal. That in fact has to be approved by parties to
the agreement. A formula specifies that approval must be made
by at least two-thirds of the parties present and voting.
The Chairman. How many parties are there likely to be? Two-
thirds of how many?
Mr. Wood-Thomas. Presently there are 27 parties. We are
aware that there will be a considerable addition to that figure
since the EU is committed to ratification.
The Chairman. Thank you very much.
How does Annex VI apply to platforms and drilling rigs at
sea and what requirements must they follow?
Mr. Balton. Consistent with the structure found in the
other annexes of MARPOL, the requirements with respect to
platforms apply to those emissions that operate from auxiliary
equipment on platforms. Those emissions arising directly from
exploration and production operations on the platforms are
exempt.
The Chairman. Annex VI limits the sulphur content of any
fuel oil used on board to 4.5 percent by weight or 45,000 parts
per million. But the present average in the global fleet is 2.7
percent by weight or 27,000 parts per million, well below this
requirement. If the United States becomes a party to Annex VI,
will it be possible to amend the agreement to require further
reductions in sulphur content or any of the other requirements?
Mr. Balton. Thank you, Senator. Indeed, the question of
sulphur content will be a point of discussion in negotiations
that are now under way at the International Maritime
Organization. In addition to the global cap of 4.5 percent, I
think most of the political will will focus on the question of
whether we might lower the 1.5 percent figure for
SOX emission control areas. Essentially, that is
going to be a decision and a discussion very much influenced by
what we believe the fuel markets can bear and the economics
associated with that, and we are presently looking at that
issue.
The Chairman. I thank you.
Annex VI requires United States ships and foreign ships
entering our ports to be in compliance with this requirement.
What regulatory regimes are in place to enforce these
provisions?
Mr. Wood-Thomas. The implementing legislation for Annex VI
will come in the form of a set of amendments to the Act to
Prevent Pollution from Ships. In addition, we currently have
regulations applicable to oxides of nitrogen under the Clean
Air Act that are applicable to different categories of marine
diesel engines.
The Chairman. Finally, is any implementing legislation
required on this treaty necessary to bring United States law in
accord with Annex VI, and if so what is the status of that
legislation?
Mr. Balton. Yes, Mr. Chairman, we believe that legislation
would be necessary to fully implement U.S. obligations under
Annex VI. The legislation, as Mr. Wood-Thomas just said, would
likely take the form of a series of amendments to an existing
law, the Act to Prevent Pollution from Ships. Such legislation
once again is in the very final stages of development and
clearance within the administration and the administration
hopes to have it before Congress very shortly.
The Chairman. I thank you very much, Secretary Balton and
Mr. Thomas, for your testimony on each of these four treaties.
You have made an excellent record, I believe, and obviously
demonstrated that the administration has been thoughtful about
the parameters of the treaties and the implications for the
other parties, as well as for United States parties, and we
thank you for that consideration.
I would like now to turn to the Convention on Supplementary
Compensation for Nuclear Damage. We welcome our witnesses on
this occasion: Mr. Warren M. Stern, Senior Coordinator for
Nuclear Safety in the Department of State; and James Bennett
McRae, Assistant General Counsel, Civilian Nuclear Programs, in
the Department of Energy. Gentlemen, we are appreciative of
your coming today and, as I have indicated, your full
statements will be made a part of the record. But please
proceed in any way that you think would be helpful for
consideration of this treaty.
STATEMENT OF WARREN M. STERN, SENIOR COORDINATOR FOR NUCLEAR
SAFETY, DEPARTMENT OF STATE
Mr. Stern. Thank you, Mr. Chairman. I appreciate the
opportunity to testify before you today on the Convention on
Supplementary Compensation for Nuclear Damage. As you noted, I
have submitted detailed testimony for the record and will
provide a summary now so that we can quickly get to the
questions that you have on this important treaty.
I would note that, in addition to Mr. McRae, who was part
of the negotiating team for the treaty, we also have with us
today Marjorie Nordlinger from the Nuclear Regulatory
Commission, who can help to answer questions.
The Chairman. Would you please identify----
[Ms. Nordlinger raises her hand.]
Mr. Stern. Marjorie was part of the negotiating team.
The Chairman. Excellent.
Mr. Stern. As well as Ms. Julie Herr from State Department
also.
The Chairman. Great.
Mr. Stern. Mr. Chairman, the CSC lays the foundation for a
global legal regime governing civil nuclear liability. This is
a regime that does not currently exist. This regime will
benefit victims of nuclear incidents, U.S. suppliers of nuclear
equipment and technology, and the government of the United
States. United States leadership is essential in developing
participation in this global nuclear liability regime.
At its core, the CSC provides predictable procedures to
assure that in the event of a nuclear incident resources will
be available from both domestic and international sources to
compensate victims. The CSC incorporates three well-accepted
principles for dealing with nuclear liability. The first
principle requires that all claims resulting from a covered
nuclear incident be adjudicated in a single forum. In nearly
all cases that forum would be the courts of the party in whose
territory the nuclear incident occurs.
The second principle is that liability for all claims is
channeled to the operator of the nuclear installation. The
third principle is that the operator has strict liability, that
is there is no need to prove fault, in the case of an incident.
U.S. participation in this liability regime will allow its
exporters of nuclear technology and equipment to compete more
effectively in foreign markets. Today these firms are exposed
to potentially unlimited liability claims and believe that they
are disadvantaged in terms of--in relation to their foreign
competitors.
Mr. Chairman, in previous international efforts a global
liability regime failed for two key reasons. The Vienna
Convention on Civil Liability failed because it does not
include the U.S., the world's largest nuclear generator, as
well as non-nuclear states. The U.S. could not join the Vienna
regime because it would require that the U.S. alter our
fundamental tort law system, a step that we have been unwilling
to take. The Vienna Convention also does not provide an
incentive for non-nuclear states to join.
The CSC addresses the first of these problems by providing
a grandfather clause that allows the U.S. to join without
altering our fundamental tort law system. The incentive
problem, that is for non-nuclear generating states, is solved
by the creation of a supplementary fund of roughly $450 million
at its maximum to ensure that there is an international fund to
compensate victims of these non-nuclear generating states in
the case of a nuclear incident.
Mr. Chairman, to date 13 countries have signed the CSC and
3 have ratified it. U.S. leadership is essential. This is a
small number. The CSC was created in essence for us and by us.
It was created to deal with our fundamental problems with the
international regime as it existed. Without U.S. leadership,
the regime will go nowhere.
We seek your advice and consent and appreciate your
consideration.
I will now turn to Mr. McRae from the Department of Energy.
[Mr. Stern's prepared statement follows:]
Prepared Statement of Warren Stern
Mr. Chairman and members of the committee: I appreciate this
opportunity to discuss with you the Convention on Supplementary
Compensation for Nuclear Damage (``CSC''). On November 15, 2002, the
President transmitted the CSC to the Senate for advice and consent to
ratification. We urge that the Senate give its advice and consent to
ratification.
The CSC lays the foundation for a global legal regime governing
civil nuclear liability--a regime that does not currently exist. This
regime will benefit victims of nuclear incidents, United States
suppliers of nuclear equipment and technology, and the Government of
the United States, as well as other countries around the world that
become parties.
United States leadership is essential in developing and encouraging
participation in this global civil nuclear liability regime.
At its core, the CSC provides predictable procedures to assure
that, in the event of a nuclear incident, resources will be available,
from both domestic and international sources, to compensate victims.
The CSC incorporates three well-accepted principles for dealing
with nuclear liability. The first principle requires that all claims
resulting from a covered nuclear incident be adjudicated in a single
forum. In nearly all cases, that forum would be the courts of the Party
in whose territory the nuclear incident occurs. The second principle is
that liability for all claims is channeled to the operator of the
nuclear installation. The third principle is that the operator has
strict liability without the need to prove fault).
United States participation in this liability regime will also
allow its exporters of nuclear technology and equipment to compete more
effectively in foreign markets. Today, these firms are exposed to
potentially unlimited liability claims through their foreign businesses
and consider themselves to be at a disadvantage from their foreign
competitors.
Once the United States and the state whose nationals are involved
are both Parties to the CSC, liability exposure will be channeled to
the operator in the ``installation state,'' thus substantially limiting
the nuclear liability risk of United States suppliers. Once the CSC is
widely adopted, the United States nuclear supplier industry will be
able to compete abroad under a single set of rules.
The CSC will also support United States objectives of improving
nuclear safety globally. Once widely adopted, the CSC will eliminate
ongoing concerns on the part of United States nuclear suppliers about
damage claims by victims of accidents at a facility where they have
supplied safety-related equipment.
The CSC is divided into two parts, a main body and an annex. The
main body creates mechanisms for compensating nuclear damage caused by
a nuclear incident in an installation operated within a state that is a
CSC Party. The Annex contains a grandfather clause specifically
designed to permit the United States to join the CSC without
substantive change to the Price-Anderson system.
Under the regime created by the CSC, the first tier of compensation
is provided by funds made available under the laws of the Party within
whose territory the installation at which the nuclear incident occurred
is situated, or if the installation is not situated within the
territory of any state, the Party by which or under the authority of
which the nuclear installation is operated. The minimum first tier
compensation level for CSC Parties is set at a convertible currency
equivalent to 300 million special drawing rights (SDRs) \1\ (about $450
million at current rates of exchange). There is, however, provision for
a phase-in period ending in 2007, until which time states may join the
CSC with a first tier amount equivalent to not less than 150 million
SDRs (about $225 million).
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\1\ The SDR is an international reserve asset, created by the IMF
in 1969, which serves as the unit of account of the IMF and other
international organizations. Its value is based on a basket of key
international currencies. As of 21 September 2005, its value was listed
as 1 SDR = 1.46414 USD.
---------------------------------------------------------------------------
The second tier of compensation is provided by the international
supplementary compensation fund that gives the CSC its name.
Approximately 90 percent of the international supplementary fund would
be made up of contributions assessed on the basis of the nuclear power
generating capacity (if any) of each Party to the CSC at the time the
incident occurs; the remainder would be made up of contributions
assessed on the basis of each Party's United Nations assessment.
Were all major nuclear power generating states party to the CSC
today, the international supplementary fund would provide in excess of
300 million SDRs to compensate victims. Of this amount, the United
States, as it possesses about one-third of the world's nuclear
generating capacity, would be obligated to contribute the U.S. dollar
equivalent of approximately 100 million SDRs (about $150 million).
Until a substantial number of nuclear power generating states are
parties, the United States contribution would be less.
The administration has proposed legislation to provide for
financing the United States contribution to the supplementary fund in
the event of an accident outside the United States in a manner that
does not impose a cost on United States taxpayers. My DOE colleague
will provide greater explanation of this proposed legislation.
A third tier of compensation would be available in some states,
such as the United States, that make available national funds of more
than 300 million SDRs under domestic legislation. States that make
available third tier funds are free to raise and distribute them in
accordance with domestic law. With respect to accidents within the
territory of the United States, the United States would use Price-
Anderson funds for the third tier of compensation, as necessary.
In previous international efforts, a global liability regime failed
for two key reasons. The Vienna Convention on Civil Liability for
Nuclear Damage (``Vienna Convention'') does not include the United
States--the world's largest nuclear power generator--because it would
require that the United. States alter its fundamental tort-law system--
a step the U.S. is unwilling to take. The Vienna Convention also does
not provide an incentive for non-nuclear power generating states to
give up the jurisdiction of their own courts and laws in the event of a
nuclear accident outside their territory, in order to join that regime.
The CSC addresses the first of these problems by providing the
grandfather clause in Article 2 of the Annex that allows the United
States to become a Party without alteration of Price-Anderson as it
currently exists.
The ``incentive'' problem for non-nuclear generating states is
addressed by the international supplementary fund. Fifty percent of the
fund is reserved to compensate damage occurring outside the
``installation state'' (transboundary damage), including transboundary
damage occurring in a non-nuclear power generating Party. The
availability of this fund, especially as half of it must be applied
toward transboundary damage, creates a strong incentive for such non-
nuclear states to join the regime, creating for the first time the
potential for a nuclear liability convention that will apply globally.
To date, 13 countries have signed the CSC, and three have ratified
it. This is a small number. We want to create a global regime. However,
the CSC was created in large part by the United States, to deal with a
situation unique to the United States. Other major nuclear power
generating states, and non-nuclear power generating states will not
join the regime unless the United States leads the way. The
administration seeks the advice and consent of the Senate to
ratification of the CSC so that the United States can credibly promote
the benefits of bringing the CSC into force and achieving widespread
adherence.
Thank you. for the opportunity to discuss the CSC. Let me introduce
my colleagues from the Department of Energy who are here with me to
present additional testimony.
The Chairman. Mr. McRae.
STATEMENT OF JAMES BENNETT McRAE, ASSISTANT GENERAL COUNSEL,
CIVILIAN NUCLEAR PROGRAMS, DEPARTMENT OF ENERGY
Mr. McRae. Thank you, Mr. Chairman. I appreciate this
opportunity to testify and I will try to keep my remarks short
and not repeat too much of what is in my written testimony or
repeat what Mr. Stern has already said.
In the early 1990s there were increasing concerns over
nuclear liability by U.S. suppliers. After considering various
options, the United States Government decided that the best way
to address these concerns was to become engaged in the ongoing
negotiations over nuclear liability at the International Atomic
Energy Agency and to seek a global nuclear liability regime.
After more than 5 years, in 1997 there was a diplomatic
conference that adopted the Convention on Supplementary
Compensation. The U.S. had taken the lead in promoting that
convention and I am happy to say that we were very successful
in getting our objectives. Our objectives were to have a
regime--our objective was to have a regime that would be
attractive to nuclear and non-nuclear countries. To do that, we
have provisions that require each member country to have
national law that basically incorporates the principles of
nuclear liability that were first developed here in the United
States in the 1950s when we adopted the Price-Anderson Act.
We also had provisions that provide for substantial
compensation in the event of a nuclear accident without
protracted litigation. The amounts that we achieved, while not
as high as what is currently provided here in the U.S., for
most other countries represent a substantial increase in the
amount of compensation that would be available.
We also were successful in having a definition of
environmental damage adopted that was much closer to the broad
definition that we have here in the United States. As Warren
said, we were especially successful in gaining provisions that
will not require the United States to change our basic nuclear
law.
Ratification of the CSC by the United States and other
countries will establish a global regime and, as Warren said,
because the United States was such a proponent of the CSC and
because so many of the provisions are tailored to meet the
needs of the United States, other countries, while they have
expressed support or interest in the CSC, have made it clear
that they expect the United States to take the lead in
ratifying this convention.
A global regime will have many benefits for the U.S. Among
them is that it will facilitate efforts by the Department of
Energy and other U.S. agencies to use U.S. nuclear suppliers in
nuclear projects overseas to promote important national
objectives. It also will allow nuclear suppliers to compete for
the growing market in other countries, and this will have a
number of beneficial effects. It certainly will increase jobs
here in the United States, it will help the balance of
payments, and it will help maintain our nuclear infrastructure.
It will allow our nuclear suppliers to continue to be leaders
in technology. It will provide incentives for students to
pursue degrees in nuclear technology, things which are ongoing
problems today.
I think the other main point is, while there will be no
need for any change in our basic nuclear law, there is a need
for implementing legislation that will coordinate how the
United States--as Warren said, the convention provides for an
international fund to provide supplementary compensation in the
event of a nuclear accident. That fund is made up of
contributions from member countries. There is a need to provide
for how the United States will make its contribution.
In June of 2004, former Secretary Abraham submitted
legislation for the administration that provides for how this
contribution will be paid for. In the first instance, it is the
obligation of the United States. The implementing legislation
provides that where the Price-Anderson Act covers that
situation that we will use that existing mechanism to fund the
U.S. contribution in a manner that imposes no additional
burdens on U.S. industry that contributes to Price-Anderson and
in fact increases by a slight amount the amount of compensation
that is available to cover damage from an accident.
For situations outside the United States that are not
covered by Price-Anderson, the proposed legislation basically
provides that those U.S. nuclear suppliers who benefit from
this regime will pay for it, will reimburse the U.S. for our
contribution to the international fund. That mechanism would
come into play only if the United States had to make a
contribution and it would be--the legislation provides for the
Department of Energy to adopt regulations on how that
contribution would be allocated among U.S. nuclear suppliers on
the basis of their potential risk.
I will be happy to answer any questions. Thank you.
[Mr. McRae's prepared statement follows:]
Prepared Statement of James Bennett McRae
Mr. Chairman and members of the committee: I appreciate this
opportunity to testify before you to discuss the reasons for ratifying
the Convention on Supplementary Compensation for Nuclear Damage (CSC).
By way of background, in the early 1990's, concerns over nuclear
liability were hindering many important United States initiatives to
promote nuclear safety and nuclear non-proliferation. Specifically, in
the aftermath of Chernobyl and Bophal, U.S. suppliers of goods and
services to nuclear projects were becoming increasingly reluctant to
provide goods and services to nuclear projects outside the United
States. After considering various options to deal with concerns over
nuclear liability, the United States concluded that a global nuclear
liability regime was the best solution to these concerns. This
conclusion continues to be valid. Over the years, much important work
has been delayed or left undone. In many cases, the Department of
Energy has been able to secure the assistance of U. S. firms only by
extending an unlimited indemnification to them under Public Law 85-804.
In some cases, it has been necessary to negotiate liability agreements
with the country where work is being undertaken. Earlier this year, the
U.S. and Russian Committees on Strengthening U.S.-Russian Cooperation
on Nuclear Nonproliferation of the U.S. and Russian National Academies
issued a joint report, entitled Strengthening US Russian Cooperation on
Nuclear Nonproliferation, that stresses the need to attach very high
priority to solving the nuclear liability problem and recommends that
the governments of the United States and Russia adopt and ratify the
CSC as the long-term and comprehensive solution.
In 1997, after more than five years of negotiations in which the
United States played the leading role, a Diplomatic Conference adopted
the CSC. Ratification of the CSC by the United States and a number of
other countries and its entry into force will create a global nuclear
liability regime. However, both because the United States has been the
primary proponent of the CSC and because the CSC contains a number of
provisions specifically tailored for the United States, most countries
expect the United States to take the lead in ratifying the CSC before
they will act.
The CSC has two primary elements. These elements will benefit both
potential victims by assuring the availability of substantial
compensation without protracted litigation and U. S. nuclear suppliers
by defining their potential liability exposure.
The CSC utilizes two mechanisms to assure the availability of
substantial funds to compensate victims in the event of a nuclear
incident Specifically, the national law of each member country must
guarantee the availability of at least 300 million Special Drawing
Rights (SDRs) (approximately $450 million) to compensate victims for
nuclear damage resulting from a nuclear incident. In addition, the CSC
creates an international fund to supplement the compensation available
under national law. While the amount of the international fund will be
dependent on the actual generating capacity of nuclear powerplants in
the Contracting Parties, it is reasonable to expect the fund eventually
to exceed 300 million SDR's. For comparison purposes, the recently
enacted Energy Policy Act established a $500 million limit on liability
for nuclear damage resulting from a nuclear incident outside the United
States that is covered by the Price-Anderson Act.
The CSC defines potential liability exposure by requiring the
national laws of the Contracting Parties to incorporate certain basic
principles of nuclear liability law that have been developed in the
United States and other nuclear countries over the past half century.
These principles include: (1) making operators of nuclear facilities
exclusively liable for nuclear damage; (2) imposing strict liability
and thereby eliminating protracted litigation over fault or negligence;
(3) consolidating all claims in a single forum with the focus on
expedited compensation of victims; and (4) prohibiting discrimination
among victims on the basis of nationality, domicile, or residence.
Unlike other international nuclear liability conventions, the CSC
contains an explicit provision that permits the United States to become
a CSC party while maintaining the manner in which our national law
currently implements these principles with respect to nuclear incidents
within the United States, as well as nuclear incidents outside the
United States that are subject to the Price-Anderson Act.
Ratification of the CSC by the United States and other countries
and establishment of a global nuclear liability regime will yield a
number of benefits.
First, the CSC will address the liability concerns of U. S. firms
in many cases where the United States seeks to utilize these firms in
nuclear projects around the world to promote important national
objectives.
Second, the CSC also will address the liability concerns of U. S.
firms with respect to commercial nuclear projects outside the United
States. These concerns have placed United States firms at a competitive
disadvantage. Eliminating this disadvantage will promote several
important U.S. national interests. Where a U. S. firm is the exporter
of nuclear goods or services, the requirements of U.S. law and
agreements for cooperation between the United States and the recipient
country give the United States some control over the recipient
country's use of the source technology and equipment provided. Also,
U.S. nuclear exports inevitably improve safety conditions in countries
of concern when state-of-the-art U.S. safety assistance programs are
deployed there.
Increasing nuclear exports will help the U.S. balance of trade and
create jobs in the United States. Around the world today, 30 nuclear
power plants are currently under construction. Additionally, 14
countries have announced plans to start construction of considerably
more new nuclear power plants by the year 2025. U.S. nuclear suppliers
most likely would provide goods and services to many of these new
plants if they could compete on a level playing field.
Nuclear exports also help to preserve the U.S. nuclear
infrastructure. The potential for providing goods and services to
nuclear projects outside the United States contributes significantly to
the business case for continuing nuclear business activities,
maintaining technological leadership, and for students pursuing nuclear
degrees.
While no change in how our national law deals with nuclear
incidents within the United States is necessary, there is a need to
clarify the interaction between the operation of the Price-Anderson Act
and the international fund established by the CSC, including how the
contribution by the United States to the fund will ultimately be paid.
The administration has provided proposed legislation on this matter
that can be summarized as follows.
The proposed legislation provides that if a nuclear incident is
covered by the Price-Anderson Act, then a portion of the funds made
available for public liability under the Price-Anderson Act will be
used to cover the contribution by the United States to the
international fund established by the Convention. The use of Price-
Anderson funds to cover the contribution by the United States to the
international fund will not decrease the funds available to compensate
nuclear damage since the United States will receive a corresponding
amount as part of the funds distributed from the international fund.
The contribution by the United States to the international fund and the
distribution from the international fund of a corresponding amount will
offset each other. In addition, the remaining portion of the
distribution from the international fund, which comes from
contributions by countries other than the United States, will result in
a net increase in the amount of compensation available to pay persons
indemnified under the Price-Anderson Act. The proposed legislation
takes this net increase into account by increasing the limit on public
liability under the Price-Anderson Act by the amount received from the
international fund which comes from countries other than the United
States.
The following example illustrates how the proposed legislation will
operate. For this example, assume: (1) the limitation on public
liability established pursuant the Price-Anderson Act is $10 billion;
(2) there are 100 powerplants covered by the Price-Anderson system; (3)
the operator of each powerplant must contribute $100 million to the
Price-Anderson system if legal liability reaches $10 billion; (4) 1 SDR
(special drawing right) equals $1.50; (5) the contribution by the
United States to the international fund is $100 million; (6) the
payment to the United States from the international fund is $300
million; and (7) there is a nuclear incident at a domestic nuclear
power plant resulting in damage that exceeds $10 billion. Under these
assumptions, the Price-Anderson Act would use funds from operators to
indemnify legal liability resulting from the nuclear incident until
legal liability reached $450 million (300 special drawing rights X
$1.50). At this point, the United States would use the next $100
million of funds from operators to cover the United States contribution
to the international fund. At the same time, the United States would
receive a payment of $300 million from the international fund. This
payment from the international fund would be. used to indemnify legal
liability between $450 million and $750 million. In addition, the
limitation on public liability would be increased by $200 million (that
is, by the portion of the payment that comes from contributions from
countries other than the United States). When legal liability reached
$750 million, operators would resume making funds available through the
Price-Anderson system to cover legal liability and would continue to do
so until legal liability reached the limit $10.2 billion. Under this
example, an additional $200 million would be available to indemnify
legal liability resulting from a nuclear incident covered by the Price-
Anderson Act, at no additional costs to power plant operators. In fact,
the retrospective premium imposed on an operator would be slightly
lower with respect to nuclear incidents with aggregate damage between
approximately $450 million and the increased limit on public liability.
With respect to a nuclear incident outside the United States that
is not covered by the Price-Anderson Act, the proposed legislation
requires nuclear suppliers to participate in a retrospective program to
cover the cost of the contribution by the United States to the
international fund. This program is based on the retrospective pooling
arrangement established by the Price-Anderson Act which provides a
nuclear power plant operator with insurance for potential liability
resulting from a nuclear incident at its power plant and which
determines the premium for this insurance retrospective after a nuclear
incident occurs by allocating the amount of the aggregate legal
liability actually resulting from the nuclear incident among all
nuclear power plant operators without regard to whether an operator has
any liability for the nuclear incident. The retrospective program, in
effect, provides for the collection of an insurance premium from
nuclear suppliers for the protection that the CSC gives them against
potential liability resulting from a nuclear incident outside the
United States that is not covered by the Price-Anderson Act. The
proposed legislation thus recognizes that nuclear suppliers are the
primary beneficiaries of the CSC and makes them responsible for
ultimately paying for the contingent cost to the United States
associated with the international fund.
The amount of the premium collected from a nuclear supplier will be
determined retrospectively after a nuclear incident occurs by
allocating the amount of the contribution by the United States to the
international fund among nuclear suppliers without regard to whether
the nuclear supplier has any liability for the nuclear incident. A
nuclear supplier will not be required to pay its portion of the premium
established by the retrospective program unless and until the United
States must make a contribution to the international fund established
by the CSC. The portion of the premium allocated to a nuclear supplier
will reflect the risk from which the nuclear supplier is relieved
relative to other nuclear suppliers by participation by the United
States in the global nuclear liability regime established by the CSC.
The proposed legislation requires the Secretary of Energy to determine
by rulemaking the formula for allocating the amount of the contribution
by the United States to the international fund among nuclear suppliers.
The proposed legislation specifies certain risk factors the Secretary
must take into account in determining the formula. These. risk factors
focus on the extent of the potential liability of a nuclear supplier
that could result from its activities relative to other nuclear
suppliers. The proposed legislation also lists certain factors that can
provide a basis to exclude certain nuclear suppliers that do not
provide goods or services specifically for nuclear facilities or that
do not engage in activities likely to result in significant potential
liability or that engage in such activities to only a minor extent.
The proposed legislation sets forth the procedure for the Secretary
of Energy and nuclear suppliers to follow in the event of a call for
funds under the CSC so that payments by the suppliers are made to the
Treasury of the United States and conveyed from the Treasury to the
appropriate entity in fulfillment of the obligation of the United
States to contribute to the international fund established by the CSC.
In the event a nuclear supplier defaults on its obligation to make a
payment, the proposed legislation authorizes the Secretary of Energy to
seek recovery from the supplier of the payment, appropriate interest
and civil penalties up to twice the amount of the payment.
In conclusion, I thank you for this opportunity to speak in support
of the CSC and I urge you to act expeditiously in giving your advice
and consent to the ratification of the CSC.
The Chairman. Well, thank you both very much.
I will raise the question and one or either of you may want
to respond. First of all, the primary aim, as you pointed out,
and principal benefit of the CSC would be for U.S. civil
nuclear technology exporters, and we would have the
establishment of a common international liability to better
assure that market. Could you explain how the current
international liability picture limits now or hinders United
States exporters?
Mr. Stern. I think probably the best way to work this is
if I could give a brief introduction and then Mr. McRae could
perhaps correct what I say incorrectly.
The Chairman. Very well.
Mr. Stern. Right now nuclear exporters feel that they are
greatly disadvantaged because of liability concerns. This is
not true, for example, for European exporters. In essence, if
we create a global liability regime we will all be competing on
the same basis and that is in fact what the CSC would do.
Mr. McRae. The concerns about liability are varied. They
relate--and I will go through them and I think the CSC
addresses all of them. When a company is considering whether or
not to undertake a nuclear project in another country, they
assess their national laws. They like to see a national law
that is similar to Price-Anderson and that which exists in
Western Europe, where liability is channeled to the operator,
where there is a predictable process that allows those who
might be affected by an accident to know that there will be
compensation available without protracted litigation. My
understanding is that they usually insist on such a structure
before they will consider pursuing projects there.
They also have concerns about what courts will have
jurisdiction. While there has only been one accident,
Chernobyl, that actually had trans-boundary damage, there is
that potential and the concern would be that there could be
multiple forums for lawsuits and that again the normal rule
would be that the court in the country where an accident
occurred should have jurisdiction. That is usually the case,
even with U.S. courts. Where it might come into question is if
there is the perception or the reality that there is not an
adequate remedy in the country where the accident occurred.
The CSC addresses that by giving exclusive jurisdiction to
the courts where a country--where an accident occurs, and also
by providing that there will be an adequate remedy, that there
will be substantial compensation, and that there will be rules
that allow victims to get compensation quickly and without
litigating questions like fault or negligence.
The Chairman. Thank you.
My second question really has to do with the potential
export opportunities that might be available. I am not asking
the two of you for a market analysis of all those, but from
personal experience--yesterday I addressed a large group of
people who are discussing the issues pertaining to Ukraine.
These were both people from Ukraine as well as Americans. The
Chernobyl situation which you mentioned in your testimony today
arose, but likewise the tremendous dependence that Ukraine has
on other countries for its energy resources now, even to the
point of severe debilitation of the economy if things were to
go poorly. So obviously an interest again, even despite the
tragedy, in more successful and safer nuclear energy resources.
So we were talking in practical terms about one potential
market. However, even there conceivably American suppliers
might feel constrained, as you say, if they do not see a law
similar to Price-Anderson or other favorable aspects to this.
Can you give us any idea how large of a market we are talking
about, how important this might be to that segment of American
business that is involved in this sort of nuclear technology
production?
Mr. McRae. I can try, Mr. Chairman. I think there are
probably I think around 20, 25 nuclear projects currently under
way outside the United States. I have seen estimates that, oh,
14, 15 countries may be considering initiating nuclear projects
within the next 20 years, and that the numbers that they are
talking about, it is a range, but I have seen estimates of
between 25 and 75 additional nuclear power plants.
So I think we could say somewhere between 50 and 100 new
plants in the next 20 years. Given the fact that U.S. suppliers
have some of the leading technology, we have three of the
designs, I think, three lightwater reactors, that it is
reasonable to expect that if they are allowed to compete they
will be able to secure a fair amount of that market.
Mr. Stern. If I could just add, Mr. Chairman. It is not
only a matter of new reactors, of course. There are a large
number of reactors that currently exist that were built with
U.S. technology, that will or have been relicensed for another
20 or 30 years, that will need U.S. technology and equipment.
So there is both a nuclear--there is an economic benefit to the
exporters that work on these facilities as well as a nuclear
safety benefit in terms of ensuring that those operators have
access to the best technology available, American technology.
The Chairman. The CSC could be a foundation for a new
global legal regime governing civil nuclear liability since it
would link states that are already parties to existing
liability treaties and those states not party to any civil
nuclear liability regime. The United States, Canada, Japan,
Russia, and South Korea are currently not party to any
international liability regime. Aside from the United States,
none of these states has signed the CSC.
What efforts is the administration undertaking to ensure
that those countries sign and become parties to the CSC and do
you have any information that those countries are waiting on
United States ratification to act similarly?
Mr. Stern. I appreciate the question, Mr. Chairman. Yes,
we have raised the CSC a number of times with the countries you
have listed, in particular Korea and Japan and Canada. The
message that comes back loud and strong is in fact the message
I tried to bring to the table in my initial testimony, that:
America, this is your treaty regime; it was created for you and
by you; we are not going to move until you move. So we are of
course trying to move, so we can press even harder on those
countries and others to sign and ratify the CSC.
The Chairman. How likely is it that nations that are now
parties to other international instruments governing civil
nuclear liability, such as the Paris Convention on Third Party
Liability in the field of nuclear energy, or the Vienna
Convention on Civil Liability for Nuclear Damage, will accede
to the CSC? If the United States were to ratify the CSC, what
steps would the administration take to encourage such countries
to join?
Mr. Stern. It is difficult for me, Mr. Chairman, to talk
in terms of probabilities, but I believe that once the
countries who are party to the Vienna Convention and the Paris
Convention see that the CSC gains momentum, in particular as we
gain the participation of states that are now not party to any
treaty regime, Canada and several Asian countries, the
countries who are party to Vienna and Paris will see the
benefit, the very large benefit, in creating what is a truly
global regime, because the regime that exists now cannot by its
terms be global.
Mr. McRae. Mr. Chairman, if I could add to that.
The Chairman. Yes, Mr. McRae.
Mr. McRae. During the negotiation of the CSC, we were
mindful of the need to include the Paris countries and the
Vienna countries, and we were quite careful to make it clear
that, just as the United States would be able to join the CSC
without joining our national--without changing our national
law, we set it up so that those countries which were already
party to the Paris Convention or the Vienna Convention would be
able to join the CSC without changing their national law or
without any fundamental changes in their existing treaty
relations.
As far as outreach, we have been very active with
encouraging and having the International Atomic Energy Agency
set up a group called INLEX to promote the CSC. That group has
produced a commentary that is being made available on how the
CSC operates, that will be given to member countries. They have
set up a series of workshops, I think the first of which is
going to be in Australia this December, and then I think I may
be attending that to describe the CSC. There should be one
early next year in Latin America.
We have also been active at the Nuclear Energy Agency and
their liability group. We worked with them when the Paris
countries were revising Paris and the companion Brussels
Convention to make sure that they had provisions that would
make them compatible with the Paris countries joining the CSC.
Thank you.
The Chairman. The letter of submittal states that there
could be a positive benefit to United States commercial nuclear
suppliers since the limitation on liability in the CSC would
extend to suits filed in United States courts. Does this in
effect limit the right of U.S. persons to bring suit against
entities or companies in the United States courts or against
U.S. companies for accidents overseas? Are there any other
international agreements to which the United States is
currently a party that similarly limit the rights of U.S.
persons?
Mr. Stern. Mr. Chairman, the short answer is yes, the
treaty could limit the rights of U.S. citizens to sue in U.S.
courts. The general rule under the CSC is, vis a vis courts of
other parties, only the courts of the parties within the
incident, within the state in which the incident occurs, should
have jurisdiction. As a practical matter, in today's legal
framework, where there is no CSC, we would expect that if a
nuclear incident occurs overseas U.S. courts would assert
jurisdiction over a claim only if they concluded that no
adequate remedy exists in the court of the country where the
accident occurred.
The CSC would create a regime where an adequate remedy
exists. So the answer to your question, Mr. Senator, Mr.
Chairman, is yes.
In terms of other precedents, we did a brief search and
were not able to find a good precedent for this.
The Chairman. Do you have a comment, Mr. McRae?
Mr. McRae. If I could add, the simple answer is that it
does limit jurisdiction. But there is one area where it
actually will make clear that U.S. courts have exclusive
jurisdiction where now there is a fair amount of confusion, and
that would be with respect to accidents in our exclusive
economic zone. There the convention gives exclusive
jurisdiction to U.S. courts over maritime accidents, as well as
maritime accidents where the United States would be responsible
for the operator of the ship.
So there are situations where in fact the jurisdiction of
U.S. courts is made clear and exclusive under the CSC.
The Chairman. The letter of submittal states that the
United States may become a party to the CSC, quote, ``without
substantive change to the Price-Anderson system,'' end of
quote, the primary legislation that currently covers civil
nuclear liability in the United States. Could you both
summarize the changes that will be made to Price-Anderson under
the administration's proposed implementing legislation?
Mr. Stern. Ben can correct me if I am wrong, but I believe
that the only change that would have been required was in fact
made when the Price-Anderson Act was extended a few months ago.
The other legislation that is needed, which is not and does not
affect the Price-Anderson legislation, is that which is
necessary to create the funds for U.S. contribution to the
supplementary fund. Ben I think provided a brief description of
that before and can go into greater detail if that is your
desire.
Mr. McRae. Mr. Chairman, Warren is right that the recent
Energy Policy Act made the only change that was necessary to
Price-Anderson, which was to increase the liability amount for
nuclear accidents outside the United States from $100 million
to $500 million.
I would request that the section by section that the
administration provided in connection with our proposed
legislation be incorporated into the record. It gives a
detailed discussion of the proposed legislation. I will again
just summarize that the intent in the proposed legislation was
to make sure that there was no--that in making the U.S.
contribution to the international fund that we take advantage
of Price-Anderson's collection of funds to pay for the U.S.
contribution without increasing the burden on taxpayers or on
U.S. nuclear operators and at the same time have a mechanism so
that we ensure that the amount of compensation available for an
accident would be no less and in fact slightly higher.
The Chairman. Your request for submission of that
additional information is granted. It will be made a part of
the record at the appropriate point.
Yes, Mr. Stern.
Mr. Stern. If I could add, Mr. Chairman, we will do an
additional search to see if we can find relevant treaties that
could provide a precedent for this and we will supply that
information to you.
The Chairman. That would be very helpful if you would
supplement the record with that research.
[The information referred to follows:]
We have conducted research to find an example of a relevant treaty
to which the Senate has given advice and consent to ratification, where
citizens of the United States are limited in their ability to seek
legal recourse in U.S. courts for damage or injury sustained abroad.
One example of such a treaty is the Convention for the Unification of
Certain Rules Related to International Transportation by Air, done at
Warsaw, October 12, 1929 (the ``Warsaw Convention''), and to which the
Senate gave advice and consent on June 15, 1934.
Article 28, paragraph 1, of the Warsaw Convention states,
(1) An action for damages must be brought, at the option of
the plaintiff, in the territory of one of the High Contracting
Parties, either before the court of the domicile of the carrier
or of his principal place of business, or where he has a place
of business through which the contract has been made, or before
the court at the place of destination.
The Warsaw Convention has been superseded by the Convention for the
Unification of Certain Rules for International Carriage by Air, done at
Montreal May 28, 1999 (the ``Montreal Convention''), as among parties
to the Warsaw Convention that are now parties to the Montreal
Convention. The Senate gave its advice and consent to the Montreal
Convention on July 31, 2003. Article 33 of the Montreal Convention,
entitled ``Jurisdiction,'' states,
(1) An action for damages must be brought, at the option of
the plaintiff, in the territory of one of the States Parties,
either before the court of the domicile of the carrier or of
its principal place of business, or where it has a place of
business through which the contract has been made or before the
court at the place of destination.
(2) In respect of damage resulting from the death or injury
of a passenger, an action may be brought before one of the
courts mentioned in paragraph 1 of this Article, or in the
territory of a State Party in which at the time of the accident
the passenger has his or her principal and permanent residence
and to or from which the carrier operates services for the
carriage of passengers by air, either on its own aircraft, or
on another carrier's aircraft pursuant to a commercial
agreement, and in which that carrier conducts its business of
carriage of passengers by air from premises leased or owned by
the carrier itself or by another carrier with which it has a
commercial agreement.
While other precedents may exist, we note that the example cited
above relates to a significant, longstanding treaty that has been open
to judicial scrutiny.
Mr. Stern. Thank you.
The Chairman. Now, you have touched upon the answer to this
question, but let me just raise it specifically, the
administration's proposed implementing legislation requiring
United States nuclear suppliers to pay the U.S. share of any
supplementary compensation under the convention for nuclear
incidents not covered by the Price-Anderson Act. Have you had
any comment from industry regarding their views on this
provision?
Mr. Stern. Our general impression, not surprisingly, is
that they would rather not contribute in this way. Yes, we have
discussed this with them.
The Chairman. But nevertheless you intend to propose
implementing legislation that would require that they pay these
shares?
Mr. Stern. Yes. The primary beneficiaries of the CSC are
in fact the suppliers. It is the administration's view that the
costs, if any, should not fall on the general taxpayer, but
rather those that benefit directly by the treaty.
The Chairman. Do you have any further comment, Mr. McRae?
Mr. McRae. Only to add that we were sensitive to the U.S.
industry on this issue and that following the diplomatic
conference and signing the CSC the U.S., the State Department
and Department of Energy, had numerous discussions with
representatives of the industry about what might be an
acceptable formula. I am not going to say that they want to
pay, but we certainly listened to many of their concerns and in
developing our proposal we took as much of that into account,
in the sense of trying to make sure that payments would only
occur in the unlikely event that we were to make a
contribution, and that we tried to come up with a formula on
allocating risk which is similar to that which I understand is
already used in the insurance industry to allocate risk when
there are multiple companies involved in a nuclear project.
The Chairman. Under the CSC, nuclear operators would be
held liable for damage caused by nuclear incidents at the
nuclear installations they operate. Would an operator have any
defense to liability? Would an operator have any right to
recover from third parties who might be at fault? How does this
compare to the existing United States regime under the Price-
Anderson Act?
Mr. McRae. Under the convention there are provisions that
provide the operator with a right of recourse. They are both
subject to national law. So in the case of the United States
there would be no right of recourse because that is not allowed
under Price-Anderson. In other countries, national law could
permit two situations for right of recourse. One would be
against a person who intentionally causes a nuclear accident.
The other would be where an operator and a contractor agreed by
contract for some type of right of recourse or some kind of
mechanism in the event of an accident. Those are the same
provisions that are in the existing international conventions
on liability.
The Chairman. Thank you.
What are the implications for the United States share of
the supplemental compensation fund and the overall amount of
that fund if the convention enters into force with only a small
number of countries with nuclear installations?
Mr. Stern. Mr. Chairman, if all major nuclear generators
were in fact parties and the treaty were in force, the
international fund would be roughly 300 SDRs, which translates
into approximately 450 million U.S. dollars. Of that, the U.S.
would be obligated to contribute approximately $150 million.
There is a complicated formula as parties join, but in general
if a smaller number of countries are in fact parties the fund
would be smaller and the U.S. contribution would be smaller.
There is a cap of I think, I believe, 30 percent for the U.S.
contribution.
The Chairman. Do you have a further comment, Mr. McRae?
Mr. McRae. It is a complicated formula, but we were very
sensitive to the fact that the United States might be in a
situation at the beginning of the process where we would be the
major contributor and we were mindful that there needed to be
limits and, as a practical matter, the United States will never
pay more than around 30 percent. As it matures, the amount will
be less than that. But at no point will it be more than about a
third.
The Chairman. Thank you.
When transmitting the convention to the Senate, the
administration recommended that the Senate include in its
resolution of ratification a reservation to this convention
relating to dispute resolution. Is this still the
administration's position?
Mr. Stern. Yes, Mr. Chairman.
The Chairman. You would agree?
Mr. McRae. Yes.
The Chairman. Very well.
Gentlemen, I appreciate your thoughtful answers to each of
these questions, which will once again make the strong record
of a hearing on this important treaty.
Let me just ask any of the four of you if you have any
final comments or words of wisdom that would further complete
our record, because if not I am prepared to thank you and
adjourn the hearing. Yes, Secretary Balton?
Mr. Balton. Thank you, Mr. Chairman. I should say two
things: first, to express our appreciation to you and other
members of the committee and the staff for their willingness to
take up the four treaties related to the oceans. I am sure my
colleagues would say the same with respect to the nuclear
liability convention.
I had thought in the course of questions and answers I
would have a chance to say this. I did not, so I should say it
now. All four of the oceans-related treaties are built on and
add to the framework created by the 1982 United States
Convention on the Law of the Sea and it still remains the
administration's position that we seek U.S. accession to that
treaty as well at the earliest possible time.
Thank you.
The Chairman. I thank you for that comment, and I cannot
emphasize how important administration leadership and support
will be in this issue. It is not a new issue before the
committee, but, as you recall, we have taken action with
enthusiasm, unanimously attempted to work with our colleagues
to gain some floor time in a practical way, and have not yet
been successful.
But to the extent that the Departments that are here
represented can weigh in with some of our colleagues as well as
the general public, that will be helpful. I agree it is a very
important part of the consideration of the oceans and the
fisheries that we have discussed today.
Well, I thank you very much for your testimony and we look
forward in the committee to taking action on the treaties at an
early time when we can get a quorum of our members for a
business meeting.
Let me just say, the committee has a number of further
questions for you as witnesses. Members who were not able to
attend the hearing today have requested some additional time to
review what we have asked and your responses, and then they may
be submitting questions for the record. We will ask you to
answer the questions promptly, and following completion of the
record we will have our business meeting consideration.
Thank you all and the hearing is adjourned.
[Whereupon, at 10:55 a.m., the committee was adjourned.]
A P P E N D I X
----------
Responses to Additional Questions Submitted for the Record by Members
of the Committee
Responses to Additional Questions Relating to the Convention on the
Conservation and Management of the Highly Migratory Fish Stocks in the
Western and Central Pacific Ocean (Treaty Doc. 109-1)
RESPONSES TO ADDITIONAL QUESTIONS FOR THE RECORD SUBMITTED TO DAVID A.
BALTON BY SENATOR RICHARD G. LUGAR
Question. The next meeting of the WCPF Commission is to take place
in December 2005. What issues is the Commission expected to address at
this meeting? Will the United States Delegation to the meeting include
representatives of interested U.S. territories?
Answer. The Commission is expected to consider the following issues
at the December 2005 meeting: conservation and management measures for
bigeye and yellowfin tunas; a limit on further increases in fishing
effort on northern albacore; a shark-finning prohibition similar to
those adopted by management organizations in the Atlantic (by ICCAT)
and in Eastern Pacific (by IATTC); measures to mitigate the bycatch and
mortality of sea turtles in Pacific longline fisheries; cooperation
with Inter-American Tropical Tuna Commission on shared fish stocks; and
efforts to address the continuing increase in fishing capacity, among
others. The meeting will also be held in conjunction with the first
meeting of the Commission's Technical and Compliance Committee. That
committee will consider a range of issues related to monitoring,
control and surveillance such as observer programs, vessel monitoring
systems, port state measures, and high sea boarding and inspection,
among others.
As has been the case at every negotiating session and every session
of the Preparatory Conference and the Commission, all interested U.S.
territories are invited to send a representative to participate on the
U.S. delegation.
Question. Article 25(11) of the Convention allows WCPF Commission
members to take action ``in accordance with the Agreement and
international law, including through procedures adopted by the
Commission for this purpose'' against vessels that have engaged in
activities that undermine or violate the measures adopted by the
Commission to deter such vessels from fishing in the Convention Area
until their flag State takes appropriate action. What type of action
might the United States or another member pursue against a foreign-flag
vessel under this provision?
Answer. There are various tools consistent with the Agreement and
international law that could be used to prevent and deter fishing that
undermines or violate the Commission's rules. Vessels operating in the
Convention Area in waters under the jurisdiction of a coastal State are
subject to boarding and inspection by that state and subject to the
rules, laws and regulations such State may put in place to enforce the
Commission's management measures. Vessels found to have violated such
measures could face seizure of the vessel or catch and the application
of other appropriate sanctions and penalties.
There are also measures that can be applied to vessels of Parties
to the Convention fishing outside the jurisdiction on any country;
i.e., on the high seas. Such vessels are subject to reporting
requirements, use of vessels monitoring systems and even boarding and
inspection on the high seas by other members of the Commission. When
infractions are identified, the first line of defense is action by the
flag state. If the flag state is unable or unwilling to take action,
other measures that could be applied by the United States and other
countries include denial of port access, and trade measures to prevent
the fish caught by that vessel from entering into international
commerce, as described below.
Port States may also take a variety of steps with respect to
foreign vessels that have come to their ports, e.g., to land or
transship fish. For example, port States may require such a vessel to
submit information about the vessel and its catch in advance of
arrival. The port State may also inspect the vessel while in port. If
evidence of a violation is found, the port State may take a number of
additional steps, depending on the circumstances. At a minimum, the
port State could refuse to allow the vessel to land or transship its
catch and could forward evidence of the violation to the flag State.
States that import fish from fisheries regulated by the Commission
may also take certain steps. In 2001, the Food and Agriculture
Organization adopted by consensus the International Plan of Action to
Prevent, Deter and Eliminate Illegal, Unreported and Unregulated
Fishing. This IPOA calls for States to use certain ``multilateral
market measures,'' consistent with international law, to prevent
illegally harvested fish from entering their markets. A number of other
regional fisheries management organizations, including ICCAT, have
already put in place such multilateral market measures. The WCPF
Commission is likely to consider similar schemes in the near future.
__________
RESPONSES TO ADDITIONAL QUESTIONS FOR THE RECORD SUBMITTED TO DAVID A.
BALTON BY SENATOR JOSEPH R. BIDEN, JR.
Question. Please describe the anticipated regulatory framework
under U.S. law for the implementation of the conservation and
management measures required under the Convention. How will it relate
to current regulation of any species found in U.S. jurisdiction (i.e.,
territorial waters or the EEZ) under the Magnuson-Stevens Act? Further,
Article 8 requires compatibility between conservation and management
measures established for the high seas and those adopted for areas
under national jurisdiction. Please describe how this will be assured
under U.S. law and regulation.
Answer. The administration is currently preparing proposed
legislation to implement the WCPF Convention. If such legislation, once
passed, follows the precedents implementing other such Conventions, it
would authorize the Secretary of Commerce to administer, implement and
enforce all the provisions of such legislation and regulations issued
pursuant thereto, in consultation with other appropriate agencies and
Departments. Measures with respect to fisheries currently managed under
the Magnuson-Stevens Act would also require coordination with the
respective regional fishery management council or councils. Further,
the administration's draft legislation would provide for the Secretary
to ensure, to the extent practicable, consistency between fishery
conservation and management programs administered under that
legislation with the Magnuson-Stevens Act and other legislation,
including the Tuna Conventions Act, the South Pacific Tuna Act, Pacific
Albacore legislation and the Atlantic Tunas Convention Act.
It should be noted that Article 8 applies to the Commission. Thus,
Article 8 addresses the responsibility of the Commission, rather than
individual States, regarding compatibility between measures adopted for
the high seas and those adopted for areas under national jurisdiction.
The premise of this international regime is to manage the affected fish
stocks throughout their range, which includes areas under national
jurisdiction and the high seas. The Convention specifies that the area
of application of any measure shall be determined at the time the
measure is adopted. For its part, we expect that the U.S. delegations
to these meetings, working in concert with other like-minded
delegations, will work to ensure that measures adopted by the
Commission do not make artificial distinctions or create
incompatibility between such areas. Such measures, once adopted, would
then be implemented by the United States under the scheme described in
the preceding paragraph.
Question. Article 8(2)(b)(ii) requires the Commission to take into
account ``previously agreed measures established and applied in respect
of the same stocks for the high seas which form part of the Convention
Area by relevant coastal States and States fishing on the high seas in
accordance with the 1982 Convention and the Agreement.'' Please
summarize any such ``previously agreed measures.''
Answer. There are a number of such previously agreed measures. As
far as the United States is concerned, such measures flow from the
Multilateral Treaty on Fisheries between the Pacific Island States and
the United States. Under that Treaty, U.S. vessels are subject to a
range of reporting and operational requirements. These include
requirements to: have a proper license issued annually by the Forum
Fisheries Agency (FFA); report catches and position on a weekly basis;
report when entering or exiting the waters under the jurisdiction of
any Party to the Treaty; notify in advance when planning to enter a
port for the purpose of unloading catch; carry an observer when
requested by the FFA; and have on board and active a vessel monitoring
system at all times in the Treaty licensing area. As far as other
countries are concerned, their vessels are subject to similar
requirements under bilateral agreements with various Pacific Island
States. The provisions of Art. 8(2)(b)(ii) are intended to help ensure
that requirements adopted under the WCPF Convention are not
inconsistent with these requirements and do not impose either duplicate
or conflicting obligations and requirements on fishing vessels in the
region.
Question. What is the anticipated U.S. share of the Commission
budget?
Answer. The notional scheme of contributions is based on a variety
of factors, the most significant of which are level of development and
level of fish catches in the region. Based on the current level of U.S.
catches, the United States share is projected at approximately 12
percent of the budget. The Commission's budget for the first year is
approximately $970,000, of which the U.S. share would be approximately
$116,000. As the Commission builds its staff and operational capacity,
the budget and the U.S. contribution will grow, but the relative share
paid by the United States will remain constant.
__________
Responses to Additional Questions Relating to the Convention for the
Strengthening on the Inter-American Tropical Tuna Commission (Treaty
Doc. 109-2)
RESPONSES TO ADDITIONAL QUESTIONS FOR THE RECORD SUBMITTED TO DAVID A.
BALTON BY SENATOR RICHARD G. LUGAR
Question. At the hearing, you indicated that the Executive Branch
will soon propose implementing legislation for this convention in the
form of amendments to the Tuna Conventions Act of 1950, which
implements the 1949 Convention that established the Inter-American
Tropical Tuna Commission. Please explain what type of amendments would
be needed in order for the United States to fully comply with the new
convention. Are any new authorities required for this purpose?
Answer. No new authorities are required in order to implement the
Antigua Convention. Nonetheless, the administration believes that some
modification to the current implementing legislation (the Tuna
Conventions Act of 1950) is warranted and is currently preparing draft
legislation to this effect. In particular, we believe some changes are
advisable to reflect the fact that, under the Antigua Convention, the
IATTC will take decisions rather than make recommendations, as under
the 1949 Convention. Other changes being considered are to remove
references in the Tunas Convention Act to a second Convention, ``the
International Commission for the Scientific Investigation of Tunas''
(the Commission, included in the 1949 Act, never came into existence)
and to update the enforcement and penalties sections to reflect current
standards and practice. The general regulatory framework within which
the United States implements its obligation under the IATTC would
remain in place.
Question. Article VII(i) of the Convention authorizes the Inter-
American Tropical Tuna Commission (IATTC) to ``establish a
comprehensive program for data collection and monitoring which shall
include such elements as the Commission determines necessary.'' What
type of data collection and monitoring measures were adopted by the
Commission under the 1949 Convention? Are any changes expected in this
area under the new Convention? The Convention on the Conservation and
Management of the Highly Migratory Fish Stocks in the Western and
Central Pacific Ocean, which the Senate is also considering, would
authorize a regional observer program and require the use of near real-
time satellite position-fixing transmitters. Do you anticipate that the
IATTC will adopt similar measures? Why or why not?
Answer. The provisions of Article VII(i) are intended to provide
the legal basis for, and thus strengthen, the Commission's program of
data collection and analysis. The Commission utilizes the international
observer program established under the Agreement on the International
Dolphin Conservation Program. This program requires 100 percent
observer coverage on all large-scale purse seine vessels operating in
the convention area. The international observer program provides that
national observers from AIDCP Parties may cover up to 50 percent of the
fishing trips by vessels from that nation. Both international and
national observer programs operate under the same requirements to
collect data on the location, gear configuration and target species of
all purse seine sets, and on bycatch and other biological data. IATTC
scientific staff conducts random catch sampling and port sampling to
collect additional data. In addition, IATTC Members are required to
provide data on set location, gear configuration and target species for
all of their vessels, not just purse seine vessels, fishing for species
covered by the Convention.
Regarding monitoring, the IATTC recently adopted a resolution
requiring the development of a satellite-based vessel monitoring system
for all large-scale fishing vessels in the convention area. Also,
vessels carrying on-board observers are required to report collected
data weekly to the IATTC Secretariat.
__________
RESPONSES TO ADDITIONAL QUESTIONS FOR THE RECORD SUBMITTED TO DAVID A.
BALTON BY SENATOR JOSEPH R. BIDEN, JR.
Question. Article V requires compatibility between conservation and
management measures established for the high seas and those adopted for
areas under national jurisdiction. Please describe how this will be
assured under U.S. law and regulation.
Answer. Measures adopted by the IATTC are implemented under U.S.
law through regulations promulgated by the National Marine Fisheries
Service through authorities derived from the Tuna Conventions Act of
1950 and in part from the Magnuson-Stevens Fishery Conservation and
Management Act. While this general legal and regulatory framework would
not change in a significant way, the administration is working to
prepare proposed amendments to that legislation to ensure consistency
with the provisions of the Antigua Convention.
Moreover, the provisions of Article V apply not only to members of
the Commission individually, but also to the Commission collectively.
As a result, it will also be incumbent upon delegations to the
Commission meetings to ensure that the Commission itself does not adopt
measures that might create inconsistencies between measures applied on
the high seas and in areas under national jurisdiction.
Question. What is the anticipated U.S. share of the Commission
budget?
Answer. The U.S. contribution for 2006 is $1.9 million. This level
of funding is the result of a multiyear, negotiated effort to reduce
the U.S. contribution from its previous level of more than $3.2
million. Previously, the United States was paying $3.2 million of a
total IATTC budget of approximately $3.6 million, or almost 90 percent
of the total. This year, due both to reductions in the U.S.
contribution and increases in contributions by other IATTC members, the
U.S. contribution of $1.9 million represents 36 percent of the total
IATTC budget of $5.2 million. We anticipate that the U.S. contribution
will decrease further, in both real and relative terms, as more
countries join the IATTC by ratifying or acceding to the Antigua
Convention.
__________
Responses to Additional Questions Relating to MARPOL Annex VI
(Treaty Doc. 108-7)
RESPONSES TO ADDITIONAL QUESTIONS FOR THE RECORD SUBMITTED TO DAVID A.
BALTON BY SENATOR RICHARD G. LUGAR
Question. The United States has ratified Annexes I, II, III, and V
of the MARPOL Convention and the administration is seeking to ratify
Annex VI. In the letter of submittal, the administration indicated that
it does not intend to seek ratification of Annex IV, which regulates
ship-generated sewage. Please explain why. How does Annex IV differ
from existing U.S. law?
Answer. The U.S. administration conducted an extensive review of
Annex IV between 1999 and 2000 since the IMO's Marine Environment
Protection Committee was then considering changes to the Annex. As a
result of that review, the United States proposed a series of
amendments designed to improve Annex IV and to better align Annex IV
with the approach taken under U.S. law. Unfortunately, the changes
proposed by the United States were not supported by the committee.
Annex IV entered into force on November 27, 2003 and the revised Annex
IV subsequently entered into force on August 1, 2005 without any of the
changes proposed by the United States.
While existing U.S. law has at least the same effect as Annex IV,
Annex IV differs from the approach outlined in U.S. law in three main
areas. First, the definition of sewage contained in Annex IV is
considerably broader than that found in U.S. law. The MARPOL definition
includes drainage from shipboard medical premises, wash tubs, and
scuppers located in such premises, as well as drainage from spaces
containing live animals. U.S. regulations prohibit commingling of
medical waste with sewage on all public and many privately owned
vessels. The broader MARPOL definition also presents the significant
challenge of processing gray water from shipboard animal spaces through
sewage plants on U.S. flag vessels as well as other difficulties in
mixing graywater and blackwater discharges.
Second, Annex IV regulates discharges as a function of distance
from land with no provisions afforded for the protection of sensitive
resources or the establishment of ``no-discharge'' zones as afforded
under U.S. law.
Third, Regulation 12 of the revised Annex IV requires Parties to
undertake the provision of adequate reception facilities at ports and
terminals for the reception of sewage. While mandatory port reception
facilities are a logical requirement under Annexes I, II, V, and VI of
MARPOL, the administration believes a requirement for sewage port
reception facilities is economically inefficient, since discharge at
sea, when properly treated, is an environmentally appropriate solution.
Question. Regulation 17 calls for Parties to Annex VI to provide
facilities to receive ozone-depleting substances and solid wastes from
exhaust cleaning systems and the implementing legislation the
administration submitted to Congress contains provisions requiring such
facilities at U.S. ports and terminals. Do any United States ports
already have such pollution reception facilities? How many of these
reception facilities would have to be constructed in order for the
United States to comply with Annex VI? What is the estimated cost of
the construction of these facilities?
Answer. The United States currently has federal regulations for the
control of ozone-depleting substances. Foreign ships are subject to
these requirements when they service equipment or systems that use
these substances while they are in the United States. It is not
expected that additional reception facilities for ozone-depleting
substances will be necessary in the U.S. to meet the requirements of
Regulations 12 and 17.
Annex VI permits the use of exhaust gas cleaning systems, for both
NOX and SOX removal (Regulations 13(3)(b) and
14(4)(b)). In the case of NOX removal, the Annex VI
standards can be achieved through engine-based controls and do not
require the use of after-treatment. Selective catalytic reduction units
or various water-based (e.g., water emulsification) devices may be fit
on a ship for additional NOX reductions, but these
technologies do not result in residues and are therefore unlikely to
present a disposal problem that would require reception facilities. In
the case of SOX removal, it is difficult to say at this time
what kinds of reception facilities will be required, how many would be
needed, or how much they would cost. SOX exhaust gas
cleaning systems for marine applications remain under development.
Limited field testing is just beginning and there are currently no
commercially manufactured devices available. Once we have a better
understanding of what form these devices are likely to take, the nature
of their residues, and how much of those residues will be required to
be disposed of through port-supplied facilities, we will be in a
position to estimate what types of reception facilities will be needed
and how much those facilities would cost.
Question. If the United States becomes a party to Annex VI, what
are the next steps that the administration would seek in negotiations
under the agreement? For instance, would the administration seek more
stringent air pollution regulations? How soon would the administration
seek to declare certain coastal areas as SOX Emission
Control Areas?
A decision was recently taken by IMO Member States to begin
discussions to consider the development of broader and more stringent
standards than those currently found in Annex VI. The administration is
committed to pursuing at the IMO more stringent standards for
NOX and is carefully considering the feasibility of more
stringent sulfur limits applicable in SOX Emission Control
Areas, as well as expanding the Annex to establish standards applicable
to existing engines, particulate matter, volatile organic compounds,
and non-diesel engines.
EPA is currently conducting studies needed to evaluate the
establishment of certain coastal waters as a SOX Emission
Control Area. Should these studies lead to a decision to seek
establishment of such an area(s), the administration would need to
submit a proposal for consideration under Annex VI of MARPOL. Such a
proposal may be submitted to the IMO as early as 2007. Recognizing the
time necessary for review at the IMO and the time required for such an
amendment to enter-into-force, any North American SOX
Emission Control Area would not be effective until 2009 or later.
Question. On July 11, 2005, several amendments to Annex VI were
adopted, including changes to the NOX Technical Code and a
provision establishing the North Sea as a SOX Emission
Control Area (SECA). The administration has indicated that, if the U.S.
instrument of ratification for Annex VI were deposited before May,
2006, the United States would be in a position to either accept these
amendments or condition its acceptance. What does the administration
intend to do with respect to these amendments?
Answer. The administration fully supported development and adoption
of these amendments and wishes to see them enter into force for the
United States.
__________
RESPONSES TO ADDITIONAL QUESTIONS FOR THE RECORD SUBMITTED TO DAVID A.
BALTON BY SENATOR JOSEPH R. BIDEN, JR.
Question. Does the Executive Branch have any data on the degree of
pollution from ships and the degree to which such pollution affects on-
shore air, quality and achievement of Clean Air Act requirements (i.e.,
National Ambient Air Quality Standards)? Please provide a summary of
the degree of this problem.
Answer. Ships that use the marine diesel engines and fuels covered
by Annex VI contribute significantly to air pollution in the United
States. EPA's Office of Transportation and Air Quality estimates that
in 1996 these engines contributed approximately 6%, 6%, and 27%,
respectively, of the national mobile source NOX, PM 2.5, and
SOX inventories. These contributions are expected to
increase to 28%, 25%, and 84%, respectively, by 2030, due to increasing
trade and the declining contribution of other mobile sources resulting
from the use of cleaner fuels and the implementation of EPA's recently
adopted emission control programs.
The effects of ship emissions on on-shore air quality can be
considerable, particularly because these emissions are concentrated in
ports and coastal and river areas. Nearly all of the emissions from
U.S. flag vessels, including tugs, ferries, fishing boats, supply
boats, and push boats, occur on our rivers and lakes, within our ports,
or in close proximity to the U.S. coast. Emissions from foreign-flagged
ocean-going vessels also contribute significantly to air quality
problems in numerous U.S. ports and coastal areas, many of which are
high-density urban areas.
The contributions of marine vessels to local NOX, PM
2.5, and SOX emission inventories have an impact on states'
ability to achieve National Ambient Air Quality Standards (NAAQS) for
ozone and PM. As many as thirty commercial ports are located in areas
that have been designated as non-attainment areas under EPA's new 8-
hour ozone and fine particulate (PM 2.5) NAAQS. States with non-
attainment areas will be required to take action to bring those areas
into compliance in the future.
Question. Please provide a summary of the current or contemplated
regulatory framework implementing the following provisions of Annex VI:
Regulations 12, 13, 14, and 16.
Answer. EPA currently has regulatory programs that control the
substances addressed in Regulations 12 (ozone-depleting substances), 13
(NOX), 14 (SOX), and 16 (incinerators). Each of
these programs was authorized by the Clean Air Act. EPA's program for
ozone-depleting substances was promulgated under Title VI of the Clean
Air Act, and regulations can be found in 40 CFR 82. The programs for
NOX and SOX emissions from marine diesel engines
and their fuels were promulgated under Title II of the Clean Air and
regulations can be found in 40 CFR 94 and 80. The Coast Guard
promulgated a notice and comment rule at 46 CFR 63.25-9 to regulate
shipboard incinerators on inspected U.S. flagged vessels. This
regulation was last amended on December 1, 1999. It incorporates some
of the elements within the scope of Annex VI, Regulation 16. The Coast
Guard grants type-approvals for incinerators in accordance with this
standard. The balance of the elements within the scope of Regulation 16
are addressed by a notice and comment rulemaking that is currently in
progress to amend that same regulation. The NPRM for those amendments
is the subject of the June 30, 2004 Federal Register entry at 67 FR
39762.
EPA's program for ozone depleting substances is very comprehensive
and already applies to ships when systems using these substances are
serviced or replaced while the vessel is in U.S. ports or territorial
waters. We do not anticipate that major revisions of the national
program will be necessary to implement Regulation 12.
EPA's standards for marine diesel engines were adopted in rules
finalized in 1999 and 2003. The Annex VI NOX limits (EPA's
Tier 1 standards) were made mandatory for engines above 2.5 1/cyl
beginning in 2004. The federal emission limits also include a second
tier of standards that apply to engines up to 30 liters per cylinder
displacement. In addition to more stringent NOX limits,
these Tier 2 standards include PM, HC, and CO limits. The federal
certification and compliance program is very similar to the Annex VI
program, although there are some differences regarding liability for
in-use compliance, emission system durability, test conditions, test
parameters, and witness testing. These requirements are sufficiently
consistent with Annex VI and the NOX Technical Code to allow
manufacturers to use a single harmonized compliance strategy to certify
under both systems.
EPA's program for marine fuels covers only distillate fuel.
Therefore, it will be necessary to develop regulations to implement the
requirements of Regulations 14 and 18 with respect to certifying
residual fuels and setting out compliance with the requirements by ship
owners. Regulations will also be required to implement a SOX
Emission Control Area should such an area be proposed and approved off
the North American coast.
Question. Regulation 13 applies to diesel engines which are
installed or undergo a major conversion on or after January I, 2000. If
the United States becomes a party to Annex VI, will this requirement
apply retroactively to engines installed or which were subject to a
major conversion between January 1, 2000 and the date of entry into
force for the United States?
Answer. The Annex stipulates that the effective date of the
NOX requirements is January 1, 2000. Compliance with the
applicable standards should not be a problem; the requirements have
been widely known, given that they were adopted in 1997. In addition,
marine engine manufacturers have provided IMO compliant engines since
January 1, 2000, and most marine classification societies have insisted
on compliance with the requirements since that time.
Question. The Secretary's letter of submittal of the treaty notes
that the United States ``intends to press'' the International Maritime
Organization to set more stringent NO), emission standards ``on an
expedited basis.'' What is the current status of the diplomatic effort
to seek such standards?
Answer. The United States is seeking to establish an additional
tier of standards under the Annex that will set more stringent limits
consistent with recent advances in emission control technology,
including after-treatment technology. We will advocate aggressive
reductions beyond the existing standards for new engines with per
cylinder displacement below 30 liters in line with the controls EPA is
considering for a new tier of federal standards for these engines. We
will also advocate significant reductions for new engines used for
propulsion on ocean-going vessels. Moreover, we will encourage adoption
of new controls applicable to existing engines that reflect the
appropriate use of emission control technologies that can be applied to
these older engines.
Question. The Secretary's letter of submittal states that the
United States is ``considering whether the Annex VI sulfur oxide limits
should be lowered under this Convention, particularly in SOX
Emission Control Areas.'' What is the current U.S. policy in this
regard, and what limits would such policy seek?
Answer. The fuel sulfur content limits in Annex VI are of interest
to the United States because the residual fuel used in ocean-going
marine engines is an important source of SOX emissions,
which in turn contribute to ambient levels of particulate matter. EPA
estimates that, in light of mandated decreases in emissions from other
sources, the relative contribution of such sources to overall mobile
source SOX inventories will increase by three to four times
by 2030. Many of these emissions affect our port communities and
coastal areas and therefore have important public health impacts.
Annex VI limits the sulfur content of marine diesel fuel to 45,000
ppm; the cap in SOX Emission Control Areas (SECAs) is 15,000
ppm. The current global average fuel sulfur content level is about
27,000 ppm. In comparison, EPA recently finalized fuel sulfur limits of
500 ppm (in 2007) and 15 ppm (in 2012) for marine distillate fuel sold
in the United States.The IMO has recently decided to review the
Regulation 14 fuel sulfur limits. Currently, U.S. policy is to work
within this review group to bring about the adoption of more stringent
international standards that will protect human health and the
environment. These standards could be achieved either by reducing the
sulfur content of fuel or by the use of after-treatment on board
vessels. These devices are currently under development by a number of
manufacturers, and it is hoped that they will offer a low-cost
alternative to very low sulfur residual fuel. These devices may also
allow achievement of standards that fuel sulfur controls alone would
not permit, since extracting sulfur from residual fuel is complicated
and very costly.
Question. In addition to strengthening NOX, standards,
does the United States believe other measures are necessary to
strengthen the agreement? If so, why does the Executive Branch propose
a declaration focused only on the NOX emission control
limits, and not the need to strengthen other provisions of Annex VI?
Answer. The United States does anticipate that other measures are
necessary to strengthen the agreement, in terms of the engine emission
standards (to cover more pollutants), the types of engines covered
(existing engines and rebuilds), and the fuel standards. The
administration proposed a declaration in May 2003 focused on the
NOX limits because the administration had already concluded
that the NOX emission limits should be lowered in the near
future. While we do anticipate the need to strengthen other aspects of
the Annex, the administration has not yet reached conclusions on the
specific changes that may be appropriate. These negotiating positions
will be based on analysis of studies currently underway and will also
be influenced by forthcoming discussions yet to be held at the
International Maritime Organization.
Question. Similarly, the Executive Branch has proposed an
understanding stating that, with respect to emissions of nitrogen
oxides pursuant to Regulation 13, the Protocol does not ``prohibit
parties from imposing more stringent measures than those identified in
the Protocol as a condition of entry into their ports or internal
waters.'' Does the same principle apply to other compounds regulated by
Annex VI? That is, may parties impose more stringent measures as a
condition of port entry or entry into internal waters for sulphur
oxides, VOC emissions, shipboard incineration, or fuel oil quality
standards? If so, why is the proposed understanding focused only on
nitrogen oxides?
Answer. The understanding is focused on NOX emissions
not because that is the only pollutant with respect to which more
stringent measures may be applied as a condition of port entry, and the
principle does not apply exclusively to NOX emissions.
NOX is highlighted because it has been the primary focus of
U.S. regulatory action and to send a signal internationally of the
importance of developing an appropriately stringent standard. Parties
are free to impose more stringent measures as a condition of port entry
for sulfur oxides, volatile organic compounds (noting the requirement
in Regulation 15 of a six-month notice requirement, as explained on
page VIII of the Letter of Submittal), shipboard incineration, fuel oil
quality, ozone-depleting substances, and NOX.
Question. Regulation 10 provides a ``clear grounds'' standard for
Inspection of a ship in port or an offshore terminal. How does this
standard compare to current Coast Guard authorities for such
inspection?
Answer. The Port State Control provisions of Regulation 10 are
similar to the corresponding provisions in the other MARPOL Annexes to
which the United States is a party. Thus, this ``clear grounds''
standard is familiar to the Coast Guard and provides a sufficient basis
for carrying out an effective Port State Control program.
Question. Will the United States enforce Annex VI against all
ships, U.S. and foreign, that come into all of the waters over which
the U.S. has jurisdiction--i.e., in ports, in the territorial sea, and
in the exclusive economic zone?
Answer. In the draft implementing legislation forwarded to Congress
on October 6, 2005, the administration proposed that the United States
enforce Annex VI against U.S. ships wherever located, consistent with
the existing provisions of the Act to Prevent Pollution from Ships (see
33 U.S.C. Sec. 1902(a)(1)), and against foreign ships to the extent
set forth in the proposed implementing legislation.
Question. Does the Executive Branch regard Annex VI as a
``generally accepted international rule or standard'' as that term is
used in Articles 21 and 211 of the UN Convention on the Law of the Sea?
Answer. Whether a particular measure within a treaty is considered
a ``generally accepted international rule or standard'' within the
meaning of various provisions of the Law of the Sea Convention would
depend upon a variety of factors, such as: whether the rule/standard
has been formally adopted; whether it is in force; the number and type
of States adopting the standard; the extent to which the group
represents States whose vital interests are affected by the standard;
and State practice. In this case, we do not need to reach the issue
whether one or more of the measures reflected in Annex VI constitutes a
generally accepted international rule of standard, as our proposed
implementing legislation does not rely on the coastal State authorities
set forth in the LOS Convention that depend upon the existence of such
a rule/standard.
Question. MARPOL does not apply to any warship, naval auxiliary or
other ship owned or operated by a state and used on government service.
But the Convention does require that such ships act ``in a manner
consistent, so far as is reasonable and practicable, with the present
Convention.'' How will Annex VI be applied to U.S. sovereign vessels?
How does that compare to the application of other MARPOL annexes to
sovereign vessels?
Answer. The draft legislation submitted by the administration
provides authority to the EPA. Administrator to apply some or all Annex
VI standards to non-combat public vessels of the United States. Such
application requires the concurrence of the Secretary of the affected
Department or Departments. U.S. treatment of U.S. public vessels under
the Act to Prevent Pollution from Ships (APPS) for Annexes I and II of
MARPOL exempts all U.S. public vessels. MARPOL Annex III is implemented
through statutes and regulations pertaining to the transportation of
hazardous materials, which require the exclusion of U.S. public
vessels. With respect to Annex V, APPS requires compliance by all U.S.
public vessels, with certain exceptions during time of war and from
Regulation 5 of Annex V under specified conditions.
As noted in the transmittal package, Article 3 of MARPOL exempts
warships, naval auxiliary and other ships owned or operated by a State
and used in governmental non-commercial service, from the application
of the provisions of the Convention. Such vessels are therefore
excluded from the application of Amex VI. At the same time, each Party
is required to take appropriate measures not impairing the operations
or operational capabilities of such ships owned or operated by it, to
ensure that such ships act in a manner consistent, so far as is
reasonable and practicable, with Annex VI. The United States already
meets this requirement with respect to its sovereign immune vessels;
the proposed legislation's exclusions will help ensure the maximum
degree of flexibility in avoiding circumstances that could impair the
operations or operational capabilities of Navy ships. Most U.S. Navy
fossil fuel-powered ships now use gas turbines, which are not regulated
by Annex VI, for main propulsion. U.S. Navy ships that use diesel
engines for main propulsion use low (less than 1%) sulfur distillate
fuel that is much cleaner than the heavy fuel oils used by many
commercial marine diesel engines. Procurement programs for future
diesel-powered ships specify that diesel engines for main propulsion
meet emissions standards in Annex VI. In addition, new classes of
surface ships are no longer constructed to use CFCs in shipboard air
conditioning and refrigeration equipment, or halons in shipboard fire-
fighting equipment.
Question. The Secretary's letter of transmittal states that the
United States may seek the establishment of sulphur oxides emission
control areas off the North American coasts. What would be the process,
and timetable, of reaching such a decision within the U.S. government?
Has that process commenced?
Answer. EPA, working with interested states, is conducting studies
to investigate whether some portion of the waters adjacent to the North
American coast would warrant designation as a SOX Emission
Control Area (SECA) under Annex VI. Given the time necessary to conduct
these studies, we do not foresee a decision by the administration on
this question until early 2007 or later. We further anticipate that any
decision in this regard would involve consultations with Canada and
Mexico. Any decision to pursue designation of a SECA would also be
subject to subsequent review and approval at the IMO by other Parties
to Annex VI.
Question. Amendments to MARPOL Annexes proceed through a simplified
amendment procedure. U.S. acceptance of amendments to Annex VI would
not, therefore, involve Senate consent. When Annex III was before this
committee for consideration, then-Chairman Pell sought assurances that
none of the amendments contemplated by this procedure would be of
``such a nature as would require advice and consent of the Senate.''
The Executive Branch witness, Admiral Kime (Commandant of the Coast
Guard), assured Senator Pell that the committee would ``be apprised of
all pending amendments, to ensure that they are of a technical
nature.'' (Hearing on Maritime Treaties before Senate Committee on
Foreign Relations, Apr. 16, 1991, S. Hrg. 102-106, at 16).
a. How many amendments to MARPOL Annexes have been accepted
since April 1991?
b. Has this committee been consulted about those amendments?
c. What is the procedure in the Executive Branch for ensuring
consultation with the Senate on such amendments?
d. Will the Executive Branch commit to consultation on
amendments in the future?
Answer. a. Twelve sets of amendments to MARPOL Annexes have entered
into force for the United States through the simplified amendment
procedure since 1991.
b. We did not consult with the Senate Foreign Relations Committee
with respect to the above-listed amendments. However, other Senate
committees and subcommittees that have cognizance over the technical
subject matter of these amendments were frequently consulted by
stakeholder agencies. In addition, staff members of such Senate
committees and subcommittees were specifically invited to participate
on some IMO Delegations and were regularly briefed and consulted on
potential amendments as they arose.
c. Although there is no formal Executive Branch procedure for
ensuring such consultations, the Department of State, in consultation
with other stakeholder agencies, reviews all proposed amendments to
MARPOL Annexes to determine whether consultation is required. On an
informal basis, as mentioned above, Senate committee and/or
subcommittee staffs are regularly briefed and consulted on potential
amendments.
d. We favor and will endeavor to facilitate regular consultations
between the State Department and other agencies involved in the
negotiation of amendments to IMO treaties, and interested congressional
committees, including the Senate Foreign Relations Committee and its
staff. In particular, we recognize the importance of consulting with
this committee, should an amendment be potentially subject to the
advice and consent of the Senate. As an aid to such consultation, it
may interest you to know that draft amendments to IMO instruments can
be accessed on an IMO password-protected website:
(www.imodocs.imo.org). We can help you to obtain access to this
website, should this be of interest.
__________
Responses to Additional Questions Relating to the Convention on
Supplementary Compensation for Nuclear Damage (Treaty Doc. 107-21)
RESPONSES TO ADDITIONAL QUESTIONS FOR THE RECORD SUBMITTED TO MR.
WARREN M. STERN BY SENATOR RICHARD G. LUGAR
Question. Article II(2) of the Convention on Supplementary
Compensation for Nuclear Damage (the ``CSC'') limits coverage of the
Convention to ``nuclear damage for which an operator of a nuclear
installation used for peaceful purposes situated in the territory of a
Contracting Party is liable'' under the Vienna Convention on Civil
Liability for Nuclear Damage, the Paris Convention on Third Party
Liability in the Field of Nuclear Energy, or national law complying
with the Annex to the Convention. The term ``peaceful purposes'' is not
defined in the Convention, but the Secretary of State's Letter of
Submittal for the Convention states:
Each Party will decide which of its installations are used
for peaceful purposes under the CSC. In the United States,
installations used for peaceful purposes would not include
nuclear submarines and other installations used for military
operations, i.e., all operations of the Department of Defense.
Some of the installations operated by the Department of Energy
may also be excluded from coverage of the CSC.
a. Is it the view of the administration that all nuclear
installations operated by the U.S. Department of Defense are used for
military operations and would therefore be excluded from coverage under
this provision?
b. Please provide a description of the types of nuclear
installations operated by the Department of Energy, and whether they
would be covered by or excluded from the Convention under this
provision.
c. What actions are available to a party if it were to disagree
with the determination of a second party as to whether a particular
nuclear installation in that second party's territory was operated for
peaceful purposes?
Answer. a. It is our view that all nuclear installations operated
by the U.S. Department of Defense would be excluded from coverage under
this provision.
b. Department of Energy (DOE) has a number of nuclear facilities
that come within the definition of ``nuclear installation'' set forth
in paragraph 2.3 of the Annex. These facilities are either reactors or
facilities for processing or storing spent fuel, high level radioactive
waste, and certain other waste that poses a significant risk. Based on
Article II of the CSC and the limitation to civil facilities in the
definition of nuclear installation set forth in 2.3, DOE does not view
the CSC as covering its facilities that prepare nuclear material or
equipment to utilize nuclear material for use by the Department of
Defense, or that receive such material or equipment from the Department
of Defense, unless and until such material and equipment are
transferred permanently to and managed within exclusively civilian
programs. Although this standard does not appear in the CSC, it is the
standard that the United States already applies in the context of the
Joint Convention on The Safety of Spent Fuel Management and on The
Safety of Radioactive Waste Management done September 5, 1997.
c. Under Article VIII, each Contracting State provides its own list
of nuclear installations, although other Contracting States may raise
objections to that State concerning its list through the Depositary
(that is, the IAEA). Article VIII provides that any unresolved
questions be dealt with in accordance with the dispute settlement
procedure of Article XVI. Article XVI provides that, in the event of a
dispute concerning the interpretation or application of the CSC, the
parties to the dispute should consult with a view toward settlement of
the dispute by negotiation or other peaceful means acceptable to them.
If such a dispute cannot be resolved within 6 months from the date of
the request for consultation, it can be submitted to arbitration or
referred to the International Court of Justice (ICJ) at the request of
any of the parties to the dispute. However, Article XVI also permits
any State to declare, at the time of ratifying, approving, accepting or
acceding to the CSC, that it does not consider itself bound by either
or both of the dispute settlement provisions. The administration has
recommended that the United States declare that it does not consider
itself bound by the dispute settlement provisions relating to
arbitration or the ICJ.
Question. What countries does the administration expect to build
new nuclear facilities or to require U.S. technology to maintain
existing facilities over the next 20 to 25 years? Are these countries
expected to become parties to the CSC?
Answer. The administration expects a global expansion in the use of
nuclear energy in the next 20 to 25 years and that U.S. technology can
and will play an important role in that expansion if U.S. firms are
given a fair chance to compete. We believe the most likely countries to
use U.S. technology to maintain existing facilities or build new ones
are Argentina, Canada, China, India, Japan, Romania, South Africa,
South Korea, and Ukraine. Argentina and Romania already have ratified
the CSC. Several other countries listed have expressed significant
interest in joining the CSC, but have indicated they are waiting to see
whether the United States (as the principal proponent of the Convention
at the IAEA) becomes a party.
Question. a. Would this Convention apply in the event of nuclear
damage caused by an act of sabotage or other terrorist attack at a
nuclear facility covered by the Convention?
b. Would the Convention affect who would be held legally liable for
the damage caused by such an attack at a facility in the United States?
c. How would it affect the compensation of victims of such an
attack?
Answer. a. Yes, this Convention would apply in the event of nuclear
damage caused by an act of sabotage or other terrorist attack at a
nuclear facility covered by the Convention.
b. No, the Convention has been crafted so that it would not affect
the operation of our domestic nuclear liability regime, including the
determination of who has civil legal liability for the damage caused by
an act of sabotage or a terrorist attack on a facility in the United
States.
c. The Convention would not deny or reduce compensation to victims
of such an attack within the United States. The Convention would
actually make available additional funds to compensate victims of an
attack within the United States (up to approximately two-thirds of the
total amount of the contributions to the supplementary fund required
with respect to a particular nuclear incident).
Question. Article I of the CSC contains a definition of the term
``nuclear reactor,'' but no definition of the term ``nuclear
installation,'' which is used throughout the CSC. How does the
administration interpret this term? Note that a definition of ``nuclear
installation'' is provided in Article 1 of the Annex to the CSC, for
purposes of the Annex. Does the term have the same meaning in the main
body of the Convention?
Answer. The CSC is an umbrella convention that, except for the
definitions and requirements explicitly specified in its main body,
fits over a country's national law, which must be based on the Vienna
Convention on Civil Liability for Nuclear Damage (the Vienna
Convention), the Paris Convention on Third Party Liability in the Field
of Nuclear Energy (the Paris Convention), or the Annex to the CSC.
Thus, the relevant definition of ``nuclear installation'' for a
particular country would depend on whether it adhered to the Vienna
Convention or the Paris Convention or it based its national law on the
provisions of the Annex. The definition of ``nuclear installation''
would be essentially the same in all of these cases. However, the Annex
also permits the United States to use an alternative definition of
``nuclear installation.'' This alternative definition is explicitly
restricted to civil facilities that are reactors or facilities for
processing or storing spent fuel, or certain products or waste that
pose a significant risk (for example high-level radioactive waste).
Question. Article III(1)(a)(i) of the CSC requires each
installation state to ensure the availability of 300 million SDRs, or a
greater amount that it may specify to the depositary, as a first tier
of compensation for victims. Alternatively, Article III(1)(a)(ii)
provides temporary authority for each party to establish a transitional
first tier amount of at least 150 million SDRs for the first ten years
the Convention is open for signature (expiring in 2007). What amount
would the administration ensure is available as a first tier of
compensation to victims of nuclear incidents covered by the CSC when
the United States is the installation state?
Answer. The amount that the administration would ensure is
available as a first tier of compensation to victims of nuclear
incidents covered by the CSC when the United States is an installation
state is $300 million SDRs.
Question. The administration has indicated that it plans to meet
U.S. obligations for contributions to the international fund created
under Article III(1)(b) of the CSC by instituting retroactive pooling
of funds from U.S. nuclear suppliers.
a. How long does the administration anticipate that it would take
the U.S. Government to collect such funds from U.S. nuclear suppliers,
assuming the maximum U.S. contribution of approximately $150 million is
needed?
b. How would the U.S. Government meet this obligation if the funds
were needed before the U.S. Government was able to collect the full
amount from the nuclear suppliers?
c. What would happen if a U.S. nuclear supplier were unwilling or
unable to provide the funds?
Answer. a. The administration-proposed legislation implementing the
CSC requires that nuclear suppliers make any required deferred payments
no later than 60 days after a notification from the Secretary of
Energy, but would permit nuclear suppliers to prorate a required
deferred payment in five equal annual payments, plus interest.
b. Under the administration-proposed legislation, deferred payments
by nuclear suppliers rather than public funds would be the ultimate
source of funds by which the United States would meet its obligation to
contribute to the supplementary fund in the event of a covered nuclear
incident necessitating such contributions. We recognize, however, the
need for a mechanism permitting the U.S. Government, to meet its
obligation to pay into the supplementary fund in a timely fashion, if
necessary before the full amount due from suppliers is collected. The
administration will work with the Congress when it considers the
implementing legislation to devise an acceptable mechanism.
c. The administration's proposed legislation would permit the
Secretary of Energy to take appropriate action to recover the amount of
payment due from a supplier, any applicable interest on the payment,
and a penalty up to twice the amount of the deferred payment due from
the supplier.
Question. Article IV of the CSC specifies the formula for
contributions by CSC parties to the international fund referred to in
Article III(1)(b). This formula is based in part on the installed
nuclear capacity of each party, counting one unit of installed capacity
for each MW of thermal power for ``each nuclear reactor situated in the
territory'' of the party. Article IV does not explicitly limit this
formula to nuclear reactors that would be covered by the Convention
(i.e., that are used for peaceful purposes). Does the administration
interpret this formula to include all nuclear reactors situated in a
party's territory, or only those that would be covered by the
Convention? What is the basis for this interpretation?
Answer. The formula includes only reactors used for peaceful
purposes, all of which would be covered by the Convention. This
interpretation is based on Article II, which deals with the purpose and
application of the Convention.
Question. Article V(2) of the CSC permits each party to assimilate
persons having their habitual residence in its territory as its
nationals for purposes of Article V(1)(b)(ii), regarding damage to a
national of a party while on the high seas. What is the
administration's intention in this regard?
Answer. The administration does not intend to exercise this option.
Question. Article IX of the CSC refers to the nuclear operator's
right of recourse, to the extent provided in the Vienna Convention, the
Paris Convention, or national legislation in accordance with the Annex
to the CSC.
a. If the United States were a party to the CSC, what right of
recourse would be available to a nuclear operator in the event of a
nuclear incident occurring in the United States? Does this differ from
current U.S. law?
b. What right of recourse is available to nuclear operators under
the Paris and Vienna Conventions?
Answer. a. As noted above, the CSC has been crafted so that it
would not affect the operation of our domestic nuclear liability
regime. Under our domestic regime, there is no right of recourse
available to a nuclear operator unless explicitly provided in a private
contract between the operator and the other party to the contract.
b. There is no right of recourse except to the extent explicitly
provided for in national law or in a private contract.
Question. What is the administration's position with regard to
Article IX(2), which permits each party to provide, through
legislation, for the recovery from the operator of public funds made
available under the CSC if damage results from fault on the part of the
operator?
Answer. Consistent with our domestic nuclear liability regime, the
United States would not exercise this option.
Question. Article XXV provides simplified amendment procedures that
would apply with regard to amending the amount of funds made available
under Article III(1)(a) or (b) or amending the formula under Article
IV(3). What procedures would apply to the adoption and entry into force
of other amendments to the Convention?
Answer. Article XXIV provides for an international conference for
the purpose of revising or amending the Convention as a whole. In
accordance with generally accepted rules of international law
(reflected in the Vienna Convention of the Law of Treaties), the
adoption of amendments at such a conference takes place by the vote of
two-thirds of the parties present and voting. A party to the Convention
at the time the amendments are adopted would only become bound by those
amendments (and the amended Convention would only enter into force for
such a party) upon its consent to be bound by the amendments.